Claire Montgomery Achieves 99% Form CRS Delivery Rate

Claire Montgomery Achieves 99% Form CRS Delivery Rate

Executive Summary

Montgomery Retirement, a leading independent RIA managing over $750 million in assets, faced a significant operational challenge in ensuring timely and accurate delivery of Form CRS (Client Relationship Summary) to all clients, as mandated by Regulation Best Interest (Reg BI). By implementing an automated Form CRS delivery system powered by integrations with their client portal and document management system, and providing enhanced advisor training, Montgomery Retirement achieved a 99% Form CRS delivery rate within the first quarter, exceeding regulatory requirements and solidifying client trust. This case study explores the strategic approach and technical implementation that led to this remarkable compliance success.

The Challenge

Prior to implementing a streamlined solution, Montgomery Retirement struggled to consistently deliver Form CRS to all clients in a timely and documented manner. The firm relied on a partially manual process involving printing, mailing, and tracking acknowledgements, which proved inefficient and prone to error. Several key challenges threatened the firm's compliance and operational efficiency:

• Manual Processes Led to Delays: The manual process resulted in an average delay of 7-10 days between client onboarding and Form CRS delivery. During peak onboarding periods, such as Q1 and Q3, this delay could extend to 2 weeks, creating potential compliance gaps.
• Tracking Difficulties: Monitoring which clients had received, reviewed, and acknowledged Form CRS proved challenging. The manual tracking system lacked real-time visibility, making it difficult to identify and address outstanding acknowledgements promptly. Estimations show approximately 5% of mailings were lost or required additional follow-up.
• Advisor Time Drain: Preparing, sending, and tracking Form CRS acknowledgements consumed a significant portion of advisor time, diverting attention from core client service and business development activities. Advisors reported spending an average of 2-3 hours per week on Form CRS-related tasks, amounting to an estimated $15,000 annually in lost productivity per advisor, based on an average advisor salary of $150,000.
• Increased Compliance Risk: The lack of a centralized and automated system heightened the risk of non-compliance with Reg BI, potentially leading to regulatory fines and reputational damage. A single instance of failing to deliver Form CRS could trigger a regulatory inquiry, resulting in legal and compliance expenses exceeding $20,000.
• Scalability Concerns: As Montgomery Retirement continued to grow, the existing manual process became increasingly unsustainable. Anticipated growth of 15% in client base within the next two years would further exacerbate the challenges of manual Form CRS delivery, potentially leading to a significant bottleneck in operations.

These combined challenges highlighted the urgent need for a more efficient, automated, and reliable solution for Form CRS delivery.

The Approach

Montgomery Retirement adopted a comprehensive approach, focusing on both technological implementation and advisor training to address the Form CRS challenge:

1. Technology Integration: The firm decided to integrate Form CRS delivery directly into its existing client portal and document management system. This approach leveraged existing technology investments and provided a seamless user experience for both advisors and clients. They considered multiple vendors before choosing a solution offering native integration with their CRM, Salesforce Financial Services Cloud.
2. Automated Delivery Workflow: A fully automated workflow was established to trigger Form CRS delivery upon client onboarding. The system automatically generates a personalized Form CRS document, sends it to the client through the client portal, and tracks client acknowledgement.
3. Electronic Signature Implementation: DocuSign was integrated to enable clients to electronically sign and acknowledge receipt of Form CRS. This eliminated the need for printing, mailing, and manual signature tracking, significantly streamlining the process.
4. Real-Time Tracking and Reporting: A centralized dashboard was created to provide real-time visibility into Form CRS delivery status. Advisors can easily monitor which clients have received, reviewed, and acknowledged the document, and identify outstanding acknowledgements for follow-up. This included custom reporting to track specific advisor delivery rates.
5. Advisor Training and Education: Comprehensive training sessions were conducted to educate advisors on the requirements of Form CRS and Reg BI. The training focused on the importance of transparency, the specific information contained in Form CRS, and best practices for discussing the document with clients. This included role-playing scenarios and compliance quizzes.
6. Compliance Review and Auditing: A robust compliance review process was established to regularly audit Form CRS delivery records and ensure adherence to regulatory requirements. This process included reviewing a sample of client files each quarter to verify that Form CRS had been delivered and acknowledged in a timely manner.
7. Client Communication Strategy: A proactive communication strategy was implemented to inform clients about the importance of Form CRS and encourage them to review and acknowledge the document promptly. This included email reminders and personalized phone calls from advisors.

This multifaceted approach ensured that Montgomery Retirement not only met its regulatory obligations but also enhanced client trust and satisfaction.

Technical Implementation

The technical implementation involved a phased approach to integrate Form CRS delivery seamlessly into Montgomery Retirement's existing technology infrastructure:

1. System Integration: The core of the solution involved integrating the Form CRS delivery system with the firm's existing client portal (built on Salesforce Financial Services Cloud) and document management system (Box). This integration enabled automated data transfer and document generation. Specific API calls were used to pull client data from Salesforce into Box, pre-populating the Form CRS template.
2. Automated Workflow Configuration: Workflows were configured within the client portal to trigger Form CRS delivery automatically upon client onboarding. The trigger event was set to occur when a new client record was created in Salesforce with the status set to "Active". This triggered a series of actions:
   • Generating a personalized Form CRS document in Box, populated with client-specific information.
   • Sending an email notification to the client through the client portal, providing a link to access and review the Form CRS document.
   • Adding a task to the advisor's task list in Salesforce to follow up with the client if acknowledgement was not received within 7 days.
3. DocuSign Integration: DocuSign was integrated to enable electronic signatures and acknowledgements. The DocuSign integration allowed clients to electronically sign the Form CRS document directly within the client portal, eliminating the need for printing, scanning, and mailing.
4. Real-Time Dashboard Development: A real-time dashboard was developed within Salesforce to provide advisors and compliance officers with visibility into Form CRS delivery status. The dashboard displayed key metrics, such as:
   • Total number of clients onboarded in the current quarter.
   • Number of Form CRS documents delivered.
   • Number of Form CRS acknowledgements received.
   • Number of outstanding Form CRS acknowledgements.
   • Average time to acknowledgement.
   • A drill-down feature allowed users to view individual client records and track the status of their Form CRS delivery.
5. Data Security and Compliance: Stringent security measures were implemented to protect client data and ensure compliance with privacy regulations. All data transmitted between systems was encrypted using AES-256 encryption. Access to the Form CRS delivery system was restricted to authorized personnel only. Regular security audits were conducted to identify and address potential vulnerabilities.

The integration leveraged the OAuth 2.0 protocol for secure authentication and authorization between the systems.

Results & ROI

The implementation of the automated Form CRS delivery system yielded significant improvements in compliance, efficiency, and client experience:

• 99% Form CRS Delivery Rate: Within the first quarter of implementation, Montgomery Retirement achieved a 99% delivery rate for Form CRS to all clients. This represented a significant improvement from the previous manual process, which had a delivery rate of approximately 85%.
• Reduced Delivery Time: The automated system reduced the average delivery time for Form CRS from 7-10 days to less than 24 hours. This ensured that clients received the document promptly upon onboarding, meeting regulatory requirements and enhancing transparency.
• Increased Advisor Efficiency: Advisors experienced a significant reduction in time spent on Form CRS-related tasks. The automated system freed up an estimated 2-3 hours per week per advisor, resulting in an estimated annual cost savings of $15,000 per advisor, based on their hourly rate.
• Improved Tracking and Reporting: The centralized dashboard provided real-time visibility into Form CRS delivery status, enabling advisors and compliance officers to easily monitor progress and identify outstanding acknowledgements. This improved tracking and reporting capabilities enhanced compliance oversight and reduced the risk of non-compliance.
• Enhanced Client Experience: Clients appreciated the convenience of receiving Form CRS electronically through the client portal and the ability to sign and acknowledge the document online. This streamlined process enhanced the client experience and reinforced the firm's commitment to transparency and client service. Client satisfaction scores related to onboarding increased by 12% after implementation.
• Cost Savings: The firm projected significant cost savings associated with reduced printing, mailing, and administrative expenses. These savings were estimated to be approximately $5,000 per year.
• Reduced Compliance Risk: By automating Form CRS delivery and tracking, Montgomery Retirement significantly reduced the risk of non-compliance with Reg BI, mitigating potential regulatory fines and reputational damage. The estimated potential fine for non-compliance was valued at $50,000, which was now mitigated.

These results demonstrate the significant impact of automation on compliance efficiency and overall business performance.

Key Takeaways

1. Automation is Essential for Compliance: Automating Form CRS delivery is crucial for ensuring timely and accurate compliance with Reg BI, especially for growing RIAs.
2. Integration is Key: Integrating Form CRS delivery with existing client portal and document management systems streamlines workflows and enhances user experience.
3. Real-Time Tracking Improves Oversight: Implementing a centralized dashboard with real-time tracking capabilities provides valuable insights into Form CRS delivery status and enables proactive compliance oversight.
4. Training and Communication are Critical: Comprehensive advisor training and proactive client communication are essential for ensuring that Form CRS is understood and valued by both advisors and clients.
5. Measure and Monitor Results: Regularly monitor key metrics, such as delivery rate and client satisfaction, to assess the effectiveness of the Form CRS delivery system and identify areas for improvement.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate compliance tasks and deliver a superior client experience. Visit our tools to see how we can help your practice.