By Matt Mercer, Operations Manager
With a continued focus of sharing more about our technology and processes in 2021, we’d like to share a process that is used quite frequently. One of the most integral ways we work with clients is to help them contribute or distribute funds within their investment accounts. To help go over some of those details and how we’re trying to better use technology, I thought I would call in the reinforcements in the form of Lena Parrish, a Financial Planning Specialist at TPC based in our Moline office.
Matt: Lena, thanks for taking a few minutes to chat today. You have been with The Planning Center for nearly 3 years and were hired to help assist clients with their custodial needs. Can you talk a little bit about the client experience when it comes to contributing money into their accounts and distributing money from their accounts?
Lena: Sure! When I first started, each office was in a slightly different place from how they used technology through these processes. Here in the Moline office, we were very reliant on the paper process, forms, and physical checks with the contribution process. However, the Minneapolis office had started to use more of the automated processes within E*Trade Advisor Services. When it comes to the distribution process, we have been using electronic options firmwide for quite a while.
Matt: Interesting. That gives us a good snapshot of where we were 3 years ago. Can you tell us how this process has improved since then?
Lena: The processes within each of our custodians have not changed too much, but we are promoting the electronic options they offer. Both E*Trade Advisor Services and Schwab offer electronic contributions or distributions that tie directly to your bank of record. There are also ways to have systematic distributions or contributions if you want those transactions to occur monthly.
Matt: What did the client contribution process look like when we went into a work from home mode and pandemic state?
Lena: A year ago we would have people stop in whenever convenient or mail in checks to our office. We did not have near as many mail delays, so check processing on our end was much quicker. When we receive a check, we give the check a quick audit so we have all necessary information on the front end. We then have a standard process where we document which account this contribution is for. We then scan the check, create a memo, send the check via mail, and then track the check accordingly. When we went into our work from home state, nobody was in the office, so mail and check processing was really based on whoever was available. We did notice some mail delays occasionally and we did not have the option to stop by an office to drop off a check. Doors were locked and we were working from home. As the pandemic went on, we had a lot of clients start using the electronic option.
Matt: In your experience, what is the most client friendly way to contribute or distribute from an investment account?
Lena: From my perspective having these electronic options tied to a client’s bank account is the most efficient, but it really comes down to what the client is comfortable with. Setting this up is quite simple. It takes one form and then a client can tell us when they want money to move and we can do it quickly. No writing checks, no mailing or possible mail delays, no need to stop by the office. We have plenty of clients that use both methods and that is ok too. If a client wants to continue sending checks to deposit, we can do that. Whatever is easiest for them.
Matt: Can every client use the electronic contribution or distribution within their custodian?
Lena: Yes, every client can use some form of these electronic options, but there may be some instances when a form still needs to be signed. It just depends on the account type.
Matt: Is there anything else you would want people to know about electronic money movement at The Planning Center?
Lena: The only additional thing I would add is that it is secure. We are sending secure emails to the client and once we have the information on file, there is a direct link between the custodian and the client’s bank account which make transfers very easy. There would no longer be a possibility of a check getting lost in the mail. I have seen a check get lost in the mail, but I have not seen any issues with identity theft affecting the electronic contribution or distribution processes. We have identity verification policies in place to verbally verify every distribution. Additionally, any new bank instructions or information are verified by speaking with the client and then by having them sign either electronically or by hand.
Matt: Thanks for bringing up the client security. I agree. While there is always a risk of identity theft when information is being shared, we’ve haven’t seen an electronic transfer go wrong.
If you are interested in learning more about how these contribution or distribution processes can be made more efficient for you, do not hesitate to reach out. Thankfully, we have a few different options on how to process these requests and will follow whichever process works best for you.
Matt Mercer is an Operations Manager in the Quad Cities office of The Planning Center, a fee-only financial planning and wealth management firm.
Please email him at: email@example.com.