Opening new client accounts is a common activity, but it is not always straightforward. Not in Good Order (NIGO) errors can get in the way of operational success. These issues occur when account applications are incomplete, inaccurate or do not meet compliance regulations. Such snafus can create delays, cause undue frustration for staff and clients, jeopardise one’s reputation and prove to be costly.
Why it matters
While NIGO errors may not trigger fines, they are often tied to broader compliance issues, particularly in recordkeeping. The U.S. Securities and Exchange Commission (SEC) has imposed hefty fines on firms for recordkeeping violations. For instance, in 2024, the SEC fined 26 firms a combined US$392.75 million for failing to maintain and preserve electronic communications.
This worst-case scenario is unlikely to happen. However, in the interest of helping you sleep better at night, we have outlined the top five reasons for NIGO errors and how to get in front of them.
Five NIGO errors to watch for
1. Incomplete or missing documentation
Missing or incomplete forms and documents can create delays. In these situations, advisers or clients overlook required fields or omit supplemental documentation, like identification or signatures.
How to prevent this:
- Use a checklist to guide account opening activities.
- Implement digital forms with required fields tied to a workflow.
- Use tools like Docupace with built-in technology that ensures all required documentation is complete before submission.
2. Manual data entry mistakes
Errors can find their way into documents, especially when advisers are under tight deadlines. Incorrect names, account numbers, or financial information can all lead to NIGO flags.
How to prevent this:
- Use a digital solution like PreciseFP to collect and maintain clean, accurate client data.
- Double and triple-check critical details before hitting “submit.”
- Integrate your CRM with platforms like Docupace to improve accuracy.
3. Non-compliance with regulations
The financial services industry is governed by stringent requirements that vary by jurisdiction and account type. Failing to meet AML/KYC verifications or disregarding updated regulatory requirements often introduces delays.
How to prevent this:
- Stay current on regulatory changes through ongoing compliance training.
- Integrate compliance-checking solutions into your account-opening process.
- Invest in platforms like Docupace, which automatically flags compliance issues before it is too late.
According to the 2023 kitces report on financial adviser technology use, only about 54% of advisers reported using solutions to address compliance. Where do you stand in terms of adoption?
4. Incorrect signatures or missing e-signatures
Signatures that do not match clients’ official records or missing e-signatures are errors that can result in account application rejections.
How to prevent this:
- Adopt e-signature solutions that verify authenticity and store records securely.
- Cross-reference signature requirements based on the account type and client profile.
5. Lack of oversight and communication
When account opening is a team effort, it can have unintended consequences and create trouble downstream. For example, poor coordination and lack of visibility can lead to miscommunication, delays, and errors.
How to prevent this:
- Implement a centralised workflow management system like Hubly.
- Encourage advisers, clients, and back-office staff to use solutions that track real-time progress.
Reduce NIGO errors, worry less
There is a better way — investing in the right tools on the front end can save you precious time, resources, and even your hair. The 2024 Kitces report on how financial planners actually do financial planning captures this sentiment: “The single greatest constraint on advisers’ productive capacity is time — making it their most valuable resource.”
That is where Docupace comes in. Our user-centric cloud-based platform boosts efficiency by automating and digitising your account-opening workflows. Put simply, Docupace makes it easier to tackle NIGO errors before they occur.
But do not just take our word for it. Sign up for a discovery call today and experience how our platform can revolutionise your new account opening process. Reduce errors, save time, and deliver a seamless client onboarding experience through better process management.
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