Laserfiche Pushes Its Paperless Vision on Investment Advisors

Registered investment advisors, the 10,000 small firms that now manage over $1.7 trillion in assets, talk a lot about the paperless office at conferences and such, but apparently are slow to adopt it. "RIAs are small businesses where the owner ends up acting as CTO and making all the technology decisions," says Timothy Welsh, president of Nexus Strategy, a technology consulting firm to RIAs. "Many use the Advent portfolio management system and a CRM program like Goldmine. Managing paper is one of their last technology frontiers -- only one in ten registered investment advisors has implemented document management software. What's missing is not the desire to go paperless, because everyone wants to become more efficient, but the process for how to get there."Welsh has been working with document management vendor Laserfiche, Long Beach, CA and is currently on press tour with its executives, who dropped by our office this morning. They told us Laserfiche has 500 RIA customers who are scanning documents like new account forms, correspondence, trust documents, financial plans, quarterly statements and tax forms into its system. The benefits include easier search and retrieval of these papers, less painful audits, audit trails, and more sophisticated backup and recovery. In fact, Chris Wacker, senior vice president of Laserfiche, says that in Hurricane Katrina, the company's municipal customers were secure because they had backed up their files to another facility.

RIAs need to be educated, however, in paperless office best practices, says Andy Wang, Laserfiche's director of financial marketing programs. "Many just scan documents into the folders they've set up in Microsoft Office," he says. "Then to find the documents, they have to use the Windows Find feature, which is okay if you know the document name, but if not, it's not very effective."

In the well-set-up paperless office, documents are indexed multiple ways -- by type of document (e.g. new account form), type of account, customer name or number, date, and whatever other data points are relevant, then all these fields can be searched. Wang says Laserfiche's solution can, using zoning or pattern matching, automatically capture the right fields and make them searchable, so that a clerk doesn't have to type in all this information. (Such automatic recognition requires standard format documents; Welsh says most RIAs use standard forms.)

Documents scanned into the Laserfiche system are automatically translated into ASCII text through optical character recognition and overlaid with the bitmapped image, so you can look at the original image as well as search every character in the text. Each page is scanned as a single TIFF file, so that if you look up page 73 of a 482-page document, you don't have to download the whole document, you access the very page a particular search term appears on, then you can page up or down as needed. Roles and permission are offered in the software, it can also work with those already set in Active Directory. The software also integrates with commonly used portfolio management systems, customer relationship management systems, and Microsoft Office applications. Ideally, Wang says, RIAs use the workflow built into the software to actually move documents around and conduct work through Laserfiche, rather than just use it for document retrieval.

Are these RIAs getting rid of paper entirely? Wang says that in the beginning, customers often keep paper documents in their file cabinets as backup, then as they get more comfortable with the software and get permission from the SEC to go paperless, they start shredding.