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Subscription agreement process: challenges & opportunities

Posted by Obsidian on Jun 20, 2019

Did you know that in the Canadian Capital Markets, for every dollar that comes in $3 are left on the table?

In our latest webinar we discussed how a significant portion of capital often ends up allocated or diversified in wrong places due to the inefficient onboarding process and obstacles in paperwork flows.

Here are some challenges investors and advisors are facing when it comes to subscription agreements processes flows.


Lengthy paperwork process of subscribing into OM products

There are numerous situations when investors aren’t investing because they change their mind in between the moment when they decide to invest and actually filling out the subscriptions documents.

It’s not a rare scenario in which they pass on attractive investment opportunities simply because of the additional paperwork involved. They really like the strategy but have never really moved the process forward because of the obstacle of going through the 40-page subscription document. It has nothing to do with the merits of the investments, but simply with the perception that there’s an endless flow of paperwork involved.


Incomplete documentation & errors

Another common problem in the subscription agreement process are errors made (incorrect spelling, amounts not matching, etc.) in the submitted docs. This causes extensive back and forth process of eliminating the error, in which advisors have to send it back to the client, re-enter it, re-scan, send it back, etc.

At the end of the month, fund managers get all the subscription agreements and even minor mismatch requires going back to the advisor’s office to change. At that point now, from the manager standpoint and from the sales standpoint, more time is being focused on administrative tasks and paperwork, instead of a or the further building client relationship.


Loss of data & automation capabilities

And then from the efficiency standpoint, another problem is that with paper docs valuable metadata of clients are being lost. This is something that investment companies need to drive business in the future (e.g. investment maturity dates). Manual processes add to the overall operational cost for both: the manager and their investors/advisors. This is another problem that has to be mobilised to make the process more efficient and better from understanding how the capital is being brought.

To make the subscription process streamlined and to eliminate the loss of opportunities and create the best value to investor and advisors, with the latest regulatory updates in mind, Obsidian has developed the SmartDocs suite.


How SmartDocs overcome subscription process challenges

Obsidian SmartDocs is a leading electronic subscription suite for investment managers. It is designed to create a client's “KYC passport”. i.e. all relevant information about a client that an investment firm needs to store. This information is then used to pre-populate sub docs with e-signature sign-off, to make the process seamless and convenient for end users. Also, it ties in with a notification engine so that email notifications on key dates can be sent (e.g. KYC due, or passport expiry, etc.).

Using electronic solutions like SmartDocs eliminates the possibility of incomplete documentation because if a single field is missed, the document can’t be finished and moved on to the next recipient without completing all necessary components.

On the other hand, with SmartDocs paperwork can be processed electronically in a matter of seconds which eliminates the complicated paperwork process that turns away advisors and investors.

So Smartdocs really mitigates these deficiencies, almost eliminates them and provides the speed and efficiency that is not comparable.

As there are more and more educated advisors and investors on this new technology where it is possible to process the paperwork electronically, and really take the time down in a matter of seconds from hours, the feedback has been tremendous. As they continue to embrace new technologies it’s going to be good for everyone involved. There will be more investors getting more access to some of these alternative asset classes.








Topics: Smartdocs, e signatures

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