Solving document management problems

Since the introduction of last October's Financial Services Authority (FSA) deadline on "Mortgage Day" where all IFAs and mortgage brokers had to be registered with the FSA, there has been a step change for those in the business of giving financial advice. With the requirement to register came a whole load of regulations about document storage and handling, set down in the FSAs Policy and Standards on Records Management. These have been taken up by some, but by no means all, of the industry, as Jon Halestrap explains.

The regulations brought into force on Mortgage Day covered the whole of the mortgage process. Any business activity in this area has to comply with the rules set out by the FSA. Everyone in the industry was affected, including all those involved in lending, selling and administering mortgages.

Within the regulations all documents relating to a mortgage must now be kept for the bare minimum of three years. Many of the critical documents have to be stored and remain easily retrievable for up to seven years after creation. What has this meant for IFAs caught in the headlights of the FSA?

When Mortgage Day hit, the FSA advised that "storage conditions and handling processes should be designed to protect records from unauthorised access, loss or destruction and from theft and disaster". It also recommended that "...records should be stored on media that ensure their usability, reliability, authenticity and preservation for as long as they are needed."

IFAs are now under a great deal of pressure from the FSA to be able to produce requested documents within two business days for the FSA to inspect. This is a near-impossible task for IFAs with entirely paper-based filing systems. They have now had to put processes and systems in place to be able to maintain an audit trail on documents, for instance Key Features, to prove which version a customer received. Anyone falling foul of the legislation will have to pay the penalties, either through being made to change systems and processes or by paying fines and compensation.

So what changes have come about?
The regulations have made it clear that paper record keeping is no longer going to be sufficient. IFA offices are strewn with anything from emails, diary records, reports, plans, audio and videotapes to name just a few media types. Paper records are not durable in the long term, as they are vulnerable to fire or flooding, or destruction through damp storage conditions. Many financial advisers have adopted electronic document management (EDM) systems to ensure that all types of information can be stored in one overarching system that is simple to access and search, and is securely backed up.

EDM works by scanning documents into a system where they are automatically indexed and filed electronically, so documents can then be instantly recalled by searching on key words. The systems work alongside existing software packages such as accountancy software and clients databases, so that output from several different systems may be electronically filed within the one overarching system. This means that all information relating to a particular topic, regardless of its original format, may be found and drawn together thanks to intelligent keyword searching.

Information can be found, literally, at the click of a mouse.

Paper record keeping is actually a very costly exercise. If you consider the floor space rental costs, the time spent retrieving and returning files and records (and the cost of the extra time caused by mis-filing), the actual cost of the office consumables, plus the costs of outsourcing archive storage, it starts to add up to a big number.

Not only does it makes sense in terms of saving costs and time, it plays a major role in any firms business continuity strategy, since back up and storage is an integral part of EDM.

Using EDM, archive storage costs disappear and the day-to-day costs in paper and other storage consumables are also dramatically reduced. Besides you are implicitly complying with the regulations as you are immediately making your information safely stored, searchable and easily retrievable.

Many of the IFAs we know who have introduced our EDM solutions developed here at Invu have seen that the customer service they now provide has dramatically improved. The speed of calling up client records and files has been increased beyond belief. No more need to put the client on hold for an age while routing through the filing cabinet or having to phone them back when the documents are in front of them.

Now that a watertight audit trail on documents is required by the FSA, with IFAs being required to produce some documents within two business days, EDM is essential.

If they havent done it already, now is the time for IFAs to sort out their document management.

Top of page