Docupace’s David Knoch: Back Office Transformation as the Next Frontier for Wealth Management Success

Tech-driven back office transformations – The next frontier in wealth management

Former President of 1st Global Driving Impressive Growth Since Taking the Helm at Fintech Leader Docupace

With more than 20 years providing back-office operations solutions for the wealth management industry, Docupace is now projecting a clear startup-style level of energy since CEO David Knoch took the reins 16 months ago at the Los Angeles-based fintech company.

David Knoch, CEO, Docupace

A seasoned wealth management leader, Knoch arrived at Docupace in conjunction with FTV Capital’s strategic investment in the firm in April 2020.  Until then, Knoch spent most of his career at 1st Global, one of the largest independent broker-dealers and corporate RIA firms in the wealth management space. He was named president of 1st Global in 2008, a role he served in until the company was acquired by Blucora in 2019, a successful transaction that Knoch helped spearhead.

Knoch calls the first year-plus of his tenure at Docupace “one of the most exciting times in my career.”  Already already widely viewed as the wealth management industry’s leader in digital operations solutions, the company – under Knoch’s leadership – has experienced reinvigorated growth in every sense of the word.  

Wealth Solutions Report caught up recently with Knoch to get a sense of how he thinks about the role of back office technology and workflow automation solutions in the wealth management industry, and his future plans for Docupace.

WSR:  It’s unusual to see a president of one of the largest independent wealth management firms in the country become the CEO of a fintech solutions provider to the industry.  What were the key drivers of this decision for you, and what specifically did you find appealing about joining Docupace as its CEO?

I’ve always been a big believer in the power of technology when it comes to enabling financial advisors to successfully grow their businesses by serving a greater number of clients while significantly elevating the service experience they deliver. 

And I’m passionate about the need for wealth management firms to narrow the substantial gap that currently exists between investments in the front office – how they present themselves to the outside world – and the back office – how they actually process business and operate.  

As president of one of the largest wealth management firms in the industry, I was constantly focused on bringing together the right back-office solutions and strategies to drive a transformative impact on the advisor and client experiences. And without question, Docupace stood out as one of the top fintech providers in this regard.

I was an enthusiastic repeat enterprise customer of Docupace because the company consistently delivered – and then some – on everything it promised. Partnering with Docupace at 1st Global, we achieved 97% advisor satisfaction with the back office. We also dramatically reduced new account opening times to a few hours, while driving our ability to scale our business without sacrificing quality or service. 

It’s been terrific to share a common vision with our partners at FTV Capital, where there is a clear embrace of the back office as the next frontier of strategic investment and competitive differentiation in wealth management.

WSR:  These days, you’re selling fintech solutions to the C-suite leaders of wealth management firms that you previously competed against. How does your prior experience as a key leader of a large wealth management firm enable you to better understand the needs of your target customers and to more effectively serve them?

It makes a big difference to be able to say to C-suite teams at wealth management firms, “I’ve been in your position, I know what keeps you up at night, and I know how to align our solutions with your needs to get your business where it needs to be.”

Fintech firms that aren’t led by professionals from a wealth management background frequently don’t fully appreciate how difficult it can be to build trust with financial advisors, how hard financial advisors work to earn trust with their clients – And how quickly that trust can be eroded.  

Here’s a great example: When a financial advisor moves into the implementation phase of a financial plan he or she has developed with a client, this can be a particularly fragile moment in the relationship. There’s typically a high level of financial and emotional vulnerability involved in any meaningful planning process for the client.  

Earning trust is hard, breaking trust is easy…

And if this planning process leads to a poor implementation experience, this can be incredibly unnerving to clients, with the potential to change client attitudes towards the entirety of the planning process. Ensuring that your back office-solutions and services are functioning smoothly to enable friction-free implementation can make or break the advisor-client relationship.

The key take-away is this: Our goal is to honor the hard-earned trust between the firm and the advisor, and between the advisor and end client.

We do so through our technology offerings, which provide strength, safety and security to what can be a fragile, disjointed and error-prone service experience when it comes to everything from financial planning implementation to new account onboarding and beyond.

You’ve been building out your leadership team and making strategic acquisitions since being named CEO of Docupace in April last year.  What are some of the highlights of your activities in these areas, and how does it all ladder up to Docupace’s broader strategic vision?

Our goal is to be the partner of choice to CRM, financial planning, TAMP and custodial firms by delivering industry-leading integrations with these critical business partners.  

By leveraging our core capabilities of workflow, document management, digital signature, data integration and document storage, Docupace is building the ecosystem that ties these technologies together and delivers a fully integrated back-office solution.  

We constantly review the capabilities our clients need to run an effective back-office operation and then build solutions or acquire companies to provide those services within the Docupace ecosystem. 

For example, as part of this process, we recently acquired Jaccomo, an advisor compensation and compliance solution. This enables our users to create compensation receivables when a new account is opened, automatically add securities licenses during customer onboarding, connect pre-trade and post-trade surveillance and more.  

I’m proud to be sharing this journey with a strong senior leadership team that represents both Docupace’s significant experience across the wealth management and fintech spaces. We’re honored to have Docupace Founder Michael Pinsker; Joel Friedman, employee number four at Docupace; and new executives in sales, marketing, legal and finance from Sungard, 1st Global, DST and Pershing on our senior team.

WSR:  Describe your sweet spot customer firm – What do they need from you, how can they most effectively engage with the Docupace team, and what does a successful engagement look like in terms of outcomes and metrics?

While Docupace serves half of the top 10 IBDs in America and nearly half of the top 50 with our platform and solutions, our roster of customers ranges from small to large, from RIAs to Hybrids to IBDs and beyond. This is a major differentiator:  We have hands-on experience solving operational challenges of all kinds. 

We also continuously build, change, expand, improve and enhance our platform in partnership with our customers. It’s easy to say you are “customer focused,” but we have actually structured more than 70% of our team members around the success of our customers. 

While a general service model focuses on fixing problems and keeping customers satisfied, the Docupace customer success model has been created very differently – it’s a proactive strategy for understanding and supporting the client’s desired business outcomes rather than immediate needs of the moment.

We believe each successful customer relationship is built on the delivery of a trustworthy experience that makes the customer more willing to renew their agreement and purchase additional products and services. 

These satisfied customers will not only recommend Docupace to industry peers but also proactively promote their customer experience to prospective clients.

WSR:  Everybody’s trying to develop a digital solution that drives financial advisor recruiting on a much more automated and scalable basis, but it sounds like only Docupace has such a solution that already exists and is being actively used by firms across the industry for this purpose.  Can you tell us more?

Help! We need the Docupace Transition Assistant digital solution!

Docupace is the wealth management industry leader in automating and digitizing financial advisor transitions, courtesy of our Docupace Transition Assistant solution. 

We launched the Docupace Transition Assistant Program in 2016 to meet the specific needs of a rapidly growing, top 10 independent wealth management firm. That tool, now available to all our clients, provides transitioning advisors with white-glove service that dramatically reduces transition times, allows them to quickly return to working with clients while ensuring minimal disruption.  

Since the launch of this solution, Docupace has helped transition nearly 1,200 advisors, reaching record levels of transitions processed in 2020, and putting ourselves on pace to be of even greater service to advisors throughout 2021 and onwards.

Since 2016, the Docupace Transition Assistant solution has supported:

Transition of nearly 1,200 financial advisors
Transition of 400 financial advisors and 111,000 accounts to new firms in 2020 alone
72% of transitions completed in 30 days or less

During the darkest days of the pandemic in 2020 alone, we helped transition nearly 400 advisors and 111,000 accounts to new firms.  Moreover, 72% of these accounts transitioned in 30 days or less with an additional 13% transitioning over the next 30 days.  

Put simply, we are providing a substantially faster and more accurate process than traditional methods or other digital solutions on the market.

Utilizing technology, process, advice and expertise – all consistent with securities and privacy regulations – the Docupace solution allows financial advisors to be prepared for a smooth transition the moment they affiliate with a new firm.  

At the same time, our solution minimizes demands on the advisors’ end clients, beyond obtaining client consent to have their data transitioned to a new firm. 

I wish I’d gone into the aqueduct business…

Unlike other solutions that place demands on advisors and even end clients to do the work themselves, the Docupace concierge solution moves time-intensive data scrubbing, validation, forms filling and data integration work onto the Docupace team. 

If you were able to safely take one round trip in a time machine to any place and point in history as an observer, what would you choose and why?

I’d want to witness the building of the first aqueducts to Rome. 

James Miller, Contributing Editor & Research Analyst

It wasn’t as glorious as winning massive military battles nor was it as immediately visible as the construction of giant temples.  

But the construction of the aqueduct system was an engineering feat that enabled Rome to grow and sustain itself much more effectively, thereby paving the way for all of its contributions to world history. 

I’d like to think the kind of fintech solutions we provide serve a similar purpose for our customers.

James Miller, Contributing Editor & Research Analyst at Wealth Solutions Report, can be reached via email at ContributingEd@wealthsolutionsreport.com 

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