(Image source: Advicent.)
Advicent, a Milwaukee-based provider of SaaS technology solutions for financial planning and advice, has introduced Compliance Blueprint, a suite of technology-based resources to support firms and advisors crafting compliance strategies for the Department of Labor (DOL) fiduciary ruling, set to take effect April 2017.
Advicent characterizes the launch of Compliance Blueprint as the latest of its solutions in response to specific regulatory challenges, such as Client Relationship Model (CRM) in Canada, Provisieverbod in Holland, Retail Distribution Review (RDR) in the U.K. After reviewing the new fiduciary standards, Advicent reports that it has taken three major steps in building The Compliance Blueprint: identifying applicable product functionalities and affirming its DOL readiness; partnering with industry experts and providing thought leadership; and announcing product updates to further enhance the Advicent offering.
The vendor emphasizes that while no single software or process that can completely ensure an advisor or firm will not be subject to investigation, it takes the position that internal processes coupled with robust, well-positioned financial planning software can greatly reduce the risk of noncompliance. The vendor asserts that it has prepared for changing industry regulatory-influenced dynamics by remaining ahead of the curve through its development of first-in-class tools.
The first component of The Compliance Blueprint is a technology review, the vendor says. Advicent has reviewed its NaviPlan financial planning software both internally and externally leveraging its partner North Highland (Atlanta). North Highland has identified NaviPlan as a DOL-ready option which could be used to assist clients in meeting the new standards of compliance. Regarding its NaviPlan financial planning software, Advicent reports that it has identified eight unique features offered that aid in fiduciary standard compliance:
1) Data collection: Advicent provides several simple data collection strategies to ensure a deeper understanding of every client — each thorough enough to gather the accurate comprehensive information, yet flexible enough to align with the planning processes of firms of all sizes.
2) Comprehensive planning: Comprehensive financial planning is the best way to ensure that recommendations made are in the client’s best interest, and Advicent calculation engines are widely recognized as the industry’s most advanced.
3) Scenario manager: By presenting multiple scenarios to elicit different outcomes, an advisor can clearly demonstrate that they are acting in the client’s best interest throughout the planning process.
4) Transparent client reporting: Through a transparent reporting structure, Advicent provides a strategy that allows firms to show their clients exactly how the recommended retirement strategy will play into their goals.
5) Recommendation rationale: Often the reasoning that drives a clients’ best interest is not quantifiable. For this type of recommendation, Advicent supplies freeform text entry into a financial plan that allows an advisor to provide the qualitative logic behind specific strategies.
6) Complete documentation: Advicent provides a safe and secure vault for the storage of collaborative documents and is the only financial planning software provider with the internationally recognized standard of excellence for information security, the ISO/IEC 27001:2005 Code of Practice for Information Security Management Systems (“ISMS”).
7) Compliance workflows: By allowing a firm to dictate the step-by-step process for creating a financial plan, firms can ensure the recommendations made and the justification behind those recommendations follow the same workflow as all advisors throughout the firm, increasing their case of compliance.
8) Progress reporting: By comparing current and past results from recommendations through Advicent reporting, an organization is able to demonstrate that recommendations are in the clients’ best interest and create an auditable trail of previous financial plans and successful recommendations.
Advicent is also engaged with North Highland to complete an assessment of its financial planning software to certify it is DOL-ready and equipped to meet the business needs of both firms and advisors. The assessment—which evaluated each screen and feature presented in the user interface—focused on NaviPlan Premium and Narrator Clients (the client-facing portal offered by Advicent).
Advicent partners with North Highland to offer DOL compliance services
The second component to Advicent’s Compliance Blueprint is industry expertise. Advicent is partnering with North Highland to offer assistance to advisors in implementing new processes that comply with the DOL rule. Advicent clients are now able to work with North Highland and utilize its DOL Fiduciary Foundations Playbook which includes a risk assessment, DOL readiness assessment, advisor training, and other services, the vendor reports.
By providing what the vendor calls this holistic and structured approach, Adivence says it will assist firms in quickly implementing changes that may be necessary with the new regulations. Advicent clients who take advantage of North Highland services will be offered a preferred pricing on its out-of-the-box fiduciary solution.
“North Highland’s focus on compliance and its attention to the advisor and client experience, in light of the DOL, is well-aligned with our philosophy that the client-advisor relationship is at the core of financial planning,” comments Phil Cunningham, CEO, Advicent. “We believe this partnership will greatly benefit our clients, not only with rule implementation but it will further emphasize the relational aspect of the client’s experience moving forward.”
Advicent announces new enhancements to aid in DOL compliance
The third component to The Compliance Blueprint is what the vendor calls a commitment to the future. Advicent reports that it is accelerating the development of key functionalities to be released in early 2017 including collaborative fact finding, account aggregation, and synopsis reporting — three enhancements to further manage compliance and workflow efforts. These technologies will expedite data gathering, eliminate inconsistencies, and assist financial professionals in ensuring they are providing the best advice for their clients—meeting the new fiduciary standards, the vendor says. Advicent reports that it has been developing these prior to the announcement of the DOL Conflict of Interest Rule, but that the project was fast-tracked to be included in The Compliance Blueprint as it aligns with the Advicent DOL strategy.
The collaborative fact finding enhancement is designed for the client to provide details through an interactive fact finder which includes questions around demographic information, financial accounts, insurance, and goals, the vendor says. By leveraging account aggregation technology, advisors can update their clients’ financial plan with real-time account values and seamlessly integrate this updated information into the financial plan, according to Advicent. Through synopsis reporting, advisors will receive a breakdown of assumptions and data entered into a financial plan in order to facilitate transparency. These updates enable advisors to obtain a deeper understanding of their clients’ financial situation, enhancing their best interest compliance efforts.
“Advicent strives to provide our clients with exceptional tools to empower firms and advisors for success in the face of ever-changing regulation in our industry,” comments George Fischer, VP, product strategy, Advicent. “The addition of our collaborative fact finder, account aggregation tools, and synopsis reporting along with The Compliance Blueprint, not only greatly reduces the risk of noncompliance for our clients but also elevates their client experience, allowing them to remain profitable and relevant in our shifting industry.”
“Our organization, and more importantly our tools, has been DOL-ready since the initial draft was made public,” says Cunningham. “The Compliance Blueprint is more of an answer to what we have been hearing from our existing clients and prospects. They are seeking more than just technology; they are looking for a partner to help guide their firms in the post-DOL world. We are here for them.”
Advicent summarizes the benefits of The Compliance Blueprint as offering comprehensive financial planning technology that has enabled advisors to withstand changing regulation in the past, as well as identified and validated eight unique features that will assist in compliance efforts; partnered with other industry leaders to provide consultation services and thought leadership; and accelerated development of new tools to assist in workflow and compliance management following the full implementation of the DOL fiduciary rule.