December 16, 2022
With restrictions limiting in-person meetings over the last few years, e-signatures have come out of the pandemic a mainstay for its convenience and efficiency. However, it’s important to still remember the downsides that come with this new way of business. In an interview with Advisor’s Edge, partner John Fabello raises awareness of instances where financial and other business advisors need to be mindful.
“[As the population ages, advisors] need to be wary about signs that their clients may have diminished capacity,” he said.
“It’s very hard to assess that properly or accurately if you are never meeting your client in person.”
Relationship-building is also an important part of business, an experience that can be overlooked in the new virtual world. John comments that meaningful client-advisor relationships can have a mitigating effect on a client’s inclination to complain about their account or investment losses—a particularly important consideration during periods of market volatility.
Read: COVID‑19 and electronic signatures: a guide for organizations
“More broadly, in-person contact is important for effectively discharging your know-your-client (KYC) obligations. Regulators and courts typically require evidence that you explained key concepts on KYC forms,” John added.
Lastly, occurrences where busy executives can sometimes have their assistants sign documents with their e-signature can increase the risk of overlooking important information.
“Having a client do that on an important document, like a KYC document, defeats the purpose,” he said.
“If they’re actually putting pen to paper, it’s more likely that they’re going to read at least some of that document.”
John’s solution to these concerns is simple: stay on top of documents with meetings.
“If you rely upon e-signatures, make sure you have a live conversation with your client to confirm that, if it’s an important document, they have read it and understood it, or give them the opportunity to ask questions,” he said.
“And make sure you document that.”
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