Learn about Eric Powell's advice for financial advisers in leveraging compliance technology to grow their business and build trust with clients.
In the first part of our discussion with Eric Powell of RightPlan Financial and the Future Mill, we got to know Eric and what drives his work in the financial services industry. In this second part of our talk, Eric offers his perspective and advice to other advisers on using technology to manage compliance and grow their business.
Tell me in your own words what compliance means to you and how it fits into your work.
Compliance is really doing what’s right for the client. We have strict rules that make us document what we're doing and how we're doing it. It stresses me to no end. It’s a challenge with my business because we all need an expert in certain fields, and compliance is one of them.
To me, compliance is about accountability. Psychologically, people are more accountable in the presence of others. We get a sense of needing to elevate our behaviors when we’re being evaluated; oversight helps us stay true to the rules. I could compare financial advisers with personal trainers again because people really need somebody to help hold them accountable, in all sorts of contexts. Especially when you’re trying to wear so many hats, you can oftentimes let something like that go to the side because there’s certain documentation that’s boring, not fun, and not something that we as advisers want to do at all. As a business owner, I find it easy to focus on the parts of my business that I love and delay the parts that I don’t enjoy. While I know that compliance is important, I didn’t start this business to focus on regulatory compliance.
How have you seen technology factor into compliance?
If you can automate something, it’s often the best thing to do. Compliance can be automated to a degree because it’s all about setting up processes and testing them. That’s what machines are good at, repeating processes. Humans get bored doing the same thing over and over.
Compared with other industries, the financial industry has lagged on technology, especially in the back office. With compliance, most regtech software does some tasks, but Joot is the only company I know of that’s focusing on the entire compliance program. Most advisers try to piece together a support structure. Or they rely on an attorney and pay $450 an hour to consult with them; I've done that. Unfortunately, compliance requires skill sets that many lawyers don’t have (or don’t specialize in).
Compliance is part legal, operations, finance, and more. With all this complexity, there’s a definite need for some sort of automation with compliance, and that’s why I connected with Joot. I’m working with you because I need that compliance coach in my life, but there are so many other advisers that will benefit from it as well. I think Joot is going to be a disruptor because its vision of regtech is expansive.
We’re really compelled by your story and how you too have been a disruptor in this space. I’m curious about how technology might have factored into your own history and how you use it currently with your work and your marketing efforts.
It’s funny because I’ve been learning so much about technology and automation as an older millennial. I was thinking back, and the first computer we had in our house was when I was in the fifth grade. So I’ve always known computers, but I’ve never been a computer guru. And I’ve found there’s so much technology out there that can help automate tasks. It’s something as simple as when somebody completes a DocuSign form, it can send over a message to let a bulk mailing system know this has been completed. And then an email gets generated and then is added to the list all automatically and I never touch anything. Or something as simple as the business suite with Facebook and Instagram where you can make a post on both platforms together; you can bulk load and schedule those posts. There’s a lot of things that you can do now with technology for business that you couldn’t do, say, 15 or 20 years ago.
Do any frustrating moments of your day come to mind when you think, “Technology can really help me out here?”
Compliance is a huge one. There are certain things as simple as reporting your personal trades quarterly, verifying or collecting information regularly, and having to complete a number of other tasks on a periodic basis. Doing all of that is such a pain sometimes when you have a bunch of other areas to focus on. Compliance takes time away from everything you should be working on to grow your business.
As I say, compliance is doing what's right for the client, but some of the documentation that we must do is such a drag on your schedule, time, and effort. There are ways to automate that process, which Joot can do. You must make sure you have compliance reviews on all your different accounts and on your actual policies and your paperwork, make sure that’s all in line. With Joot, you know where to look for documents, complete tasks, and go through your compliance program to make sure it’s all in good order. All your paperwork aligns instead of one thing says this and one thing says that. You get to make sure that everything is correct.
Going back to the idea of trust, do you think technology can be coupled with service in a way that helps build trust with clients?
I believe it will. I think we’re already seeing that in the industry, and I know the SEC is just starting to allow testimonials and reviews. But technology is really what’s allowing those kinds of insights to be shared. Everybody has Google and Yelp reviews. Well, if advisers are now allowed to share what clients are saying about them, that could hold advisers accountable, which then could help build trust. So that is a huge factor with technology.
And social media is such a big one. You’ll often start to find the problem child with people if they don’t have the likes or maybe when people are leaving mean comments, bad comments. Some people are just mean and going to troll people, no matter what they do. But technology can bring a lot more of that to light, who’s right and wrong on things.
And maybe social media can be a place where those conversations are reshaped to go in a more positive direction as a way of further building trust with clients?
Yeah, I’m seeing that more with robo-advisers. Their whole platforms are built on social media. One big thing in technology is affiliate marketing. Big brands are providing influencers with a link, and the influencers then refer out to the brand and the influencers get paid, and then the brand gets a new client. I'm getting to know a few of the influencers out there. It appears the big-name influencers are very cautious because they don’t want to destroy their name either.
Do you have any final words of advice for new financial advisers?
New advisers should consider how technology can help them grow and manage their business. Using the right technology will save advisers time and money so they have more of each to drive their business forward.