Is Paper Jamming Up Your DOL Preparations?

Is Paper Jamming Up Your DOL Preparations?

If there’s one thing that the has become apparent as firms prepare for the implementation of the Department of Labor Fiduciary Rule in April it is that the majority of firms, especially in the independent broker/dealer space, are years behind in their adoption of technology and as a result drowning in an ocean of paper.

For years we’ve heard talk about the “paperless office” and although today that ideal can be realized, virtually no firms in our industry are doing it despite the advantages in terms of compliant and improving client service.

Turning client onboarding into a digital process can provide a solution to numerous compliance issues as well as eliminate inefficiencies and reduce the potential for costly errors. Today the process is largely manual, with numerous points of potential failure as the same data is re-entered multiple times resulting in potential errors and non-productive time.

Although hackers and electronic mischief is a concern, the fact is that we have much more control in the digital world than when everything is on paper. Whenever you have a piece of paper outside of an electronic channel, you can’t be sure who has seen it or if any copies have been made, whereas in the digital domain, access is controlled and everything is traceable.


It’s best to take an electronic approach from the inception of the client relationship. For many clients, particularly less tech-savvy, older ones, much of this will be brand new. They might never have processed a check electronically, but they’re going to be impressed when they hand you a check, you scan it in front of them and hand it right back. The transaction has occurred and the check never left their sight. When you send a paper check via snail mail, it’s in a black hole for at least a few days and maybe it never gets to the home office at all. (The US Postal Service says it’s impossible to calculate how much mail gets lost, but in the UK a study found that an estimated 400,000 letters a week never make it to their destinations.)

Eliminating paper and making the whole process electronic greatly enhances security. The advisor can see the client’s entire financial universe and has a 360-degree view of the entire workflow—every data event, every document event, every people event. In the digital realm, there’s no need to worry about missing documents because there’s an electronic record of everything. Having client onboarding and service take place on a digital platform eliminates geographical barriers and brings all the advisors under one digital roof, so to speak.

As financial services companies grapple with what technology to use, they need to consider a technology platform that is secure, compliant and provides infinite flexibility so they aren’t starting again from scratch every time a rule changes or a new regulation is introduced.

And it’s not only in terms of the DOL Fiduciary Rule or regulations not yet introduced where the best solution is a digital approach. Advisors already have to answer to a variety of masters (SEC, FINRA, SROs, state regulators, and others) with their own requirements to satisfy, as well as the Patriot Act, certain privacy laws, and NIST standards. Having a single platform that relies on exception-based processing to ensure proper disclosure and compliance is the gold standard.

Adaptability is the primary determining factor for survival in the wild, and it’s also true in financial services. Firms that have already partnered with leading technology providers are in position to easily add-on new solutions to keep them compliant. These firms will be able to effectively transition. This is true of the DOL Fiduciary Rule and all subsequent rulings to come.

Tom Embrogno is a principal of Docupace. Previously, he brought to market the first cloud-based SEC/FINRA compliant supervisory and storage system that satisfies SEC rules 17a3 and 17a4

Tom Embrogno
Tom Embrogno
Tom Embrogno is a principal of Docupace and a financial services cyber security expert. He co-invented Docupace’s core system, the ePACS Productivity Suite. Leading Docupace’s efforts in providing Broker/Dealers and RIAs with cyber security services, Tom assesses their vulnerabilities, corrects potential gaps, and provides them with ongoing monitoring to stay protected. Prior to joining Docupace, Tom held positions as President and COO of a $60 million publicly traded technology company; COO of a national investment banking firm; and SVP of the largest field marketing arm of a national insurance company. Tom brought to market the first SEC/FINRA compliant supervisory, introducing the industry’s first cloud-based SEC/FINRA compliant storage system that satisfies SEC rules. In each of these roles, Tom developed a strong background in information technology, cyber security, and investment banking, allowing him to see first-hand the inefficiencies that are a typical part of the traditional financial services business. Tom is also a member of the American Board of Certification in Homeland Security approved electronic document management and supervisory approval solution for the securities industry. Learn more at

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