5 Challenges Resolved by Consolidating Data for DOL Compliance

Published by Emily Traxler, Director - Manager, Marketing
September 7th, 2017

As firms across the country take action to comply with recently enacted Department of Labor (DOL) regulations, consolidating data is a top priority. The latest financial rules, which kicked in this June, require firms to document and prove to regulators that they are meeting fiduciary standards in their handling of all non-exempt accounts. They also mandate full transparency into best interest contract exemptions (BICE). Firms must provide this verification in an organized, unified fashion, or they run the risk of significant fines and damaged reputation.

Common Hindrances to DOL Compliance

Data consolidation addresses five key challenges to enable firms to deliver on DOL requirements with speed, transparency, and efficiency:

  1. A significant compliance hurdle for many financial firms is that they operate without documented standards or processes. Without firm-wide procedures in place, there is no accountability for how data is handled and no way to ensure its integrity.
  2. Outdated technology poses another threat to fiduciary compliance. Firms that rely on legacy systems to store information often find their data is trapped due to their old system’s incompatibility with newer reporting and account management tools.
  3. Primitive tools also lack the scalability that firms need to manage data and compliance requirements through growth and change. Without a flexible system, financial firms may face hassle and additional expenses to meet DOL requirements as they evolve.
  4. Additionally, when firms store account data across various disparate repositories, they drastically limit oversight of their accounts. Without tools to assess the status on all accounts and flag potentially non-compliant outliers, firms face the possibility of stiff penalties.
  5. De-centralized account information also keeps firms and regulators from verifying advisor-investor interactions that are central to abiding by the DOL regulation. Auditors must have access to account communications to confirm that the appropriate disclosures for exempt accounts were issued and received.

Consolidating Data to Simplify Fiduciary Compliance

To improve accountability, firms can create repeatable work flows for their brokers and advisors. Providing adequate training to all financial professionals helps to ensure the success of the new procedures. Additionally, bringing data together into one system designed to satisfy the DOL rule can relieve advisors from assuming the full burden of carrying out process. Deploying technology to support the hands-on efforts of financial professionals can boost an organization’s efficiency in satisfying DOL requirements. The right tools can assist firms in meeting compliance challenges.

The ideal system for supporting fiduciary compliance merges an array of tools that empower advisors to fulfill all the accountability requirements stipulated by the DOL rule, right at their fingertips. Flexible CRM technology with integrated email archival, notes, document storage, and e-signature capabilities keep all critical documentation and approvals in one easily accessible place. A solution that also offers calendar access and a client portal with oversight tools that provide full visibility of all account activity keeps all parties connected.

Fee management capabilities round out a fully integrated wealth management solution, giving advisors a way to display exactly what clients are paying. The ability to quickly access fee information within individual accounts takes away stress in the event of an audit.

Simplifying DOL Compliance with the Right Solution

ARKON is First Rate’s answer to the market’s demand for a robust, comprehensive financial account management platform that simplifies compliance-related responsibilities. It contains and connects all account information securely while allowing advisors and other stakeholders full control and visibility over critical account activities.

Among its specialized features, ARKON features SIGNiX, an e-signature tool that allows brokers and advisors to execute and store financial agreements. It also includes a client portal that allows advisors to make contracts and documents available to investors while tracking whether or not they have viewed them online. ARKON allows firms to assign a special ID to compliance offers so that they may monitor all accounts and access any necessary information related to any advisor, broker, or account to verify all transactions and activity that may fall under scrutiny in an audit.    

ARKON is also cloud-based and mobile-enabled, offering advisors the ability to consolidate all calendar meetings and integrate them with Outlook. Advisors can create notes to share with their clients via the account platform, keeping all exchanges of information accessible in one place. This simplicity delights firms’ compliance teams and simplifies the otherwise daunting audit process.

About the Author: Emily Traxler, Marketing Delivery Manager, has been with First Rate since 2010. In her role she manages the Marketing team to expand awareness of the First Rate brand, fill a robust sales pipeline and maintain a positive image of First Rate and its products and services. Outside of First Rate Emily is an advocate for Jessica Glenn’s Special Spaces DFW changing lives one bedroom at a time. Connect with Emily via Twitter or LinkedIn.

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