The Best Document Management Software for IFAs: Compliance, Security and Tool Integration

To be an independent financial advisor (IFA) is to commit to a voluminous set of rules, and understandably so: with people’s life savings on the line, minor mis-steps can be catastrophic. Accordingly, governments the world over have laid down a battery of acronyms that must be supported by document management software for IFAs. 

In the UK, you’ve got guidelines laid down by the Financial Conduct Authority (FCA), the Information Commissioner's Office (ICO) under the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 - and in some cases, the Prudential Regulation Authority (PRA) and the Pensions Regulator (TPR) too. In the US, you can add the Consumer Financial Protection Bureau (CFPB) and the North American Securities Administrators Association (NASAA). It’s a lot to stay on top of, and the requirements only extend - as the world and the industry changes, enforcement is changing with it. 

On top of all that, there’s the other sort of personal data: the personalities of the clients themselves. IFA work is fundamentally more client-focused than pure accountancy, and that brings its own record-keeping requirements. Soft skills matter when talking to people about their finances, and remembering the what and why of people’s investment decision-making can be just as important as the returns those investments deliver. 

Plus, of course, you need something that’s actually going to take the effort out of filing and make your workday easier. It’s a mighty administrative requirement, and one that you need the right set of tools to handle. In this article, we’ll run through the unique needs of independent financial advisory firms and explain the essential features that they need from a document management system (DMS).

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1. Data security and legal compliance 

This is the headline requirement. Your DMS should be transparent about its compliance policies and certifications. As part of that, it should include automatic encryption and backup, role-based access control to control who can get to client files, and audit logging to track what they do when they get to them. Here are the key points to look for:

• Transparent compliance documentation: the platform holder should maintain a trust centre listing policies and processes, and be transparent about certifications it holds. 
• Encryption: this is table stakes, but the DMS should keep files encrypted and secure, both in storage and in transit
• Access control: The best document management software should support granular user access levels to restrict who can view, edit, or share specific documents
• Audit trails: Detailed logs of who accessed files, when, and what they did with them

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2. Long-term record-keeping and archiving

IFA’s are required to maintain archives for longer than other information-based businesses. FCA regulations for retention demand that anything that could be considered “financial promotion” requires an “adequate record” demonstrating its competence to do so, and those need to go into long-term storage. For pension transfers and opt-outs, the record needs to be held indefinitely - a by-product of previous pension mis-selling scandals - and even less dramatic recommendations must be recorded for at least six years. That means you need a platform that can easily handle document archiving as well as document control, in a way that doesn’t keep you paying top dollar for storage costs. This requirement doesn’t end with the business, either, so you need a platform that will support your needs even if your business ceases trading. 

The flip side of the long-term data requirement is that IFAs - like all businesses - must not retain personal data any longer than is strictly necessary, as required by GDPR. The storage limitation guidelines call for periodic reviews of the data you hold, and deletion of any that you no longer have a justification for keeping.

• Unlimited storage: the regulatory requirements aren’t going to get any skimpier, so look for a DMS with extensive or ideally unlimited document storage 
• Data retention policies: It should be possible to set rules for how long documents are kept and when they should be deleted or archived
• Archiving options for legacy files: The option to switch to cheaper long-term storage for files that don’t need regular use can save costs 

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3. Integration with industry-standard tools

Simple, this: the perfect filing system is the one that you don’t have to keep switching in and out of. A DMS that integrates closely with the platforms you already use will bring a much lower training requirement and a much speedier path to efficiency. The obvious ones to look for are Office365 and NetSuite, and other integrations are also available.

4. Easy Document Storage and Retrieval

This is in no way unique to the IFAs, but it’s no less important for it: the ability to actually lay hands on the files you need is essential for both efficiency and keeping the client happy. The perfect setup will depend on your own business, but a DMS that makes it easy to group files by client, rather than in disconnected folders, can be a huge improvement. Some other suggestions for your shopping list:

• Metadata and tagging: The ability to assign tags or metadata for easy categorisation and searching, ideally by client or project
• Advanced search feature: Powerful search tools that allow for keyword, date, or tag-based searches to quickly locate documents
• Version control: Automatically track and save document versions to ensure the latest file is always accessible, and previous versions can be retrieved if needed

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5. Robust sharing and collaboration tools 

Beyond a certain business size collaboration becomes increasingly important, as a team of specialists may need to work together on a client’s financial plans, tax docs, or investment strategies. A DMS that gives IFAs real-time collaboration on those documents, rather than compelling people to shuffle documents back and forth, will save time and reduce errors.

 When it comes to sharing that back to the client, the ability to offer a client portal they can use to access their files and communicate with your team makes a huge difference, and should improve client happiness and retention. Assuming the investment strategy pays off, of course.

• Secure sharing: Ability to share documents securely with clients or colleagues, with options for password protection and access expiration
• Real-time collaboration: Real-time editing and commenting means multiple team members can work together on the same document, fast
• Ability to create a client portal: A secure portal where clients can access their documents, view updates, and communicate with advisors
• Audit and approval workflows: Simple approval processes for client documents, with notifications and approval tracking, ideally with easy electronic signature
  
  

6. Scalability and flexibility

This is another requirement that applies to all enterprises, not just IFAs, but the complexity of IFA workflows makes it that bit more consequential. Look for a platform that can grow along with your business, and you’ll save yourself problems later on.

• Unlimited storage: Scalable storage will allow your firm to grow without worrying about running out of space.
• Customisable permissions: the ability to set permissions for different team members as the firm expands will ensure you maintain security
• Integration with other tools: to repeat ourselves, easy integration with other business tools like CRM, email platforms, and accounting software means that you 
• Mobile access: It won’t be part of the regular workflow, but a document management system with good mobile access can be advantageous for getting back to clients quickly when out of the office

For more information on DMSs, check out our main guide to the best document management software for different businesses. If you’re looking for first-hand insights about finance and accountancy firms, you can find out specific details about the improvements we’ve delivered for our existing customers, or get in touch to find out what we could do for your business.