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Online access and paperless options becoming more mainstream

Computers, phones and tablets have all become mainstream in today’s modern households. The thirst for current knowledge in a busy mobile world has never been greater. More than ten years ago, businesses began introducing new online options for clients to get financial information. Although some were slow to adopt this technology change, most clients today desire to have online access to both their bank and investment accounts.

The term online access has caused some confusion, especially when financial firms have both online access through a website (the web) and login access through an application (the app) for a tablet and smart phone. What you can access and do on both of these online platforms are different. We recommend that clients create an account and get comfortable with both to obtain all available information on their accounts. I think the hesitation early on was due to peoples’ comfort level in regard to technology and security issues.

There are many benefits to setting up online access. One of the main reasons people like online access is the ability to set up “paperless” options. With most financial firms, this is done through the website version. Going paperless is an optional choice, or an added benefit, that clients have once they have online access on the web. Let us look at some of the benefits of online access and paperless delivery.

Security

I mentioned that some people may be hesitant to go online for security reasons. Financial firms have spent enormous capital to ensure appropriate security is available for their clients. Some people could easily argue that with mail delivery being a manual process that the arrival of your mail at your home is not 100 per cent guaranteed. When you receive other people’s mail you may wonder if anyone has received yours. Many people feel that it is more secure to go paperless and not have your financial information sent by regular mail.

Customization

Clients have the ability to select and customize what documents they wish to receive by paper delivery or by paperless delivery. The three broad categories are statements (monthly statements), confirmation slips (sent after each trade) and tax documents. Clients must elect paperless or paper delivery on each account. For example, a client could elect paperless delivery on the TFSA and RRSP account but wish to have paper delivery on the taxable or cash account. It is normally less confusing for clients if they either go all paperless delivery or all paper delivery.

Timeliness

Another benefit of online access and paperless delivery is that you would be able to access your statements sooner. With paperless delivery you would receive a notification by email that your financial information is available online and you could immediately log in and view this information. With paper delivery, the statements would have to be printed by your financial firm and mailed to you. When Canada Post was going on strike, many clients converted to paperless documents to ensure they continued to get their financial information in a timely manner.

Tax documents

Many clients today like the idea of logging onto a secure website and printing off their tax documents. We also recommend that clients create “My Account” with CRA and print the slips automatically sent to them as a completeness check. Once you have set-up “My Account” with the CRA you can take advantage of their sign-in partner service. This allows you to sign into “My Account” with the CRA using the same sign-in information you use for your online access at your financial institution. This is one less password you will have to remember. If you have online access, you would be able to compile all tax slips provided you have paperless delivery and online accounts set up by March 31. If you have paperless tax documents, the latest your accountant should receive your tax documents is April 1st every year. Even if you are travelling you can access your documents and send these through to your accountant — remember to use secure email.

Environment

Paperless documents also has the added benefit of being good for the environment. Financial firms reduce printing costs, mailing/delivery costs and do their part for the environment by reducing the amount of paper they use. Clients viewing the information online can do so in a secure manner. They do not have to print the statements and worry about storing the financial information securely or shredding old documents. When clients select paperless delivery, they can go online and go back several years to look up financial information whenever they need to. It is easy to find and stays secure in the meantime.

Power of Attorney (POA) — monitor parents

In many situations, we are dealing with two or more generations in a family. When our clients are aging, we will typically have a discussion with them about steps they can do today in the event they become unable to make financial decisions. If they have reliable and responsible children, we will often suggest a family meeting where one of their adult children is introduced to us. We have a discussion about financial information for aging clients or clients suffering from dementia or Alzheimer’s disease. We like to have this conversation while our aging clients still have capacity and the ability to set up a financial power of attorney. Financial information can be confusing and create anxiety in some cases. Establishing a power of attorney, to monitor your situation can reduce this significantly. What works really well is to set up the account delivery as paperless and provide full online access to the power of attorney.

Power of Attorney (POA) — monitor children

We are often asked if we will help our clients children get started on the right path with investing. When the accounts are set up we can easily add the parent on as a power of attorney. A parent may want to gift money to their children and the POA on the account enables them to keep an eye on the child’s financial progress. Guiding your children on how to deal with money can be as important as guiding them toward a good education and profession. Children naturally do not know the different ways to invest or the different types of investment accounts.

Transfers between accounts

If you have online access set up with your bank and financial firm, it creates an added benefit of viewing both. Online access enables you to transfer funds from a bank account into your investment account. This can be done quickly and efficiently, without the need of writing physical cheques.

Kevin Greenard CPA CA FMA CFP CIM is a portfolio manager and director of wealth management with The Greenard Group at Scotia Wealth Management in Victoria. His column appears every week in the Times Colonist. Call 250-389-2138.

Protecting client information is critical in a digital world

Today there are many different ways for us to communicate financial information with clients: in-person, over the phone, email and so on. With all of these ways to communicate, it is important for us to continue to keep client information confidential and secure. Social insurance numbers, dates of births, investment account numbers, bank account numbers — it’s all sensitive information that must be protected.

Years ago we would regularly share confidential information by fax with clients. The information would then be printed out and stored in physical files. Clients would have a landline and often owned a fax machine as well. With the introduction of the personal computer and the internet, email became an alternative mode of communication. Most view email as quick and efficient; however, using email to share confidential information does have some risks.

One of the major risks involved in sending confidential information by regular email is having that information getting into the wrong hands or having someone else trying to extract this information. With a regular email, information that you receive, or is sent to you, will be sitting within your email account. Anyone who inappropriately accesses your email account will also have access to all of the information within your account (sent box and inbox). If you have confidential emails saved in your Gmail, Hotmail, Yahoo, or Shaw accounts, it could be at risk.

When we receive an email from a client we must take the extra precaution to ensure the information is legitimate. For example, when clients contact us via email to request funds we always require a phone call as well to confirm that this is a legitimate request coming from our client.

In an effort to help keep information secure and confidential, there are some extra steps that both advisors and clients are starting to take. One example is by using the financial firm’s own server to share confidential information. A simplistic explanation of a secure email is that you are really not even getting the information emailed to you. I know that sounds confusing.

Let us use an example of an adviser who is setting up a telephone meeting with a client who has never used the secured server. Beforehand, the client would like to obtain a copy of their holdings detail report and recommendations for the account. The portfolio manager types a message to the client that looks like a regular email, types “[Secure]” in the subject line, and attaches two PDF documents — the holdings detail report and recommendations.

On the client’s side, they will not initially get the message with the two attachments. What they first receive is an automated message that the portfolio manager has attempted to send the client a secure, encrypted message. Within this automated email message is a link that will direct the client to the firm’s own server.

For clients that have not used the secure service, they must click on the register button. This triggers the client to receive a temporary password to their email account to enable them to register for the secure email service. To register as a first-time user, a client will need to immediately establish a secret password (different from the temporary password), as well as create a challenge question(s) that can be used to verify your identity.

An added safety measure that is available is having your secure account automatically locked if there are multiple failed attempts with an invalid password. In order to recover this password you would need to answer one or more of the challenge questions mentioned above. Other features may also include having the original message deleted automatically after a certain time period.

The process for registration takes less than five minutes. Once the client has the account set up then they will be able to see the message sent by the portfolio manager.

It is important to note the confidential information remains on the firm’s own server and is encrypted. It will look like you are accessing an email within your email account, but the information is actually accessed through the password-protected account on the financial firm’s server.

By viewing information only on this encrypted service, you greatly minimize your exposure to your information being compromised. Using the above phone meeting example, the client can easily print the holdings detail report and recommendations or simply view them online. The information does not sit within the client’s email account.

Of course, clients have the ability to download the information from the encrypted server to their own personal devices and accounts. Once the information has been forwarded from the server, rather than just viewed or printed, then clients could be potentially exposing themselves to other risks.

We understand that having to create an account and enter a password to view your financial information might feel a bit cumbersome. In the end you can have more comfort that your confidential account information is being treated appropriately and ensuring that information does not get into the wrong hands.

Kevin Greenard CPA CA FMA CFP CIM is a Portfolio Manager and Director, Wealth Management with The Greenard Group at Scotia Wealth Management in Victoria. His column appears every week in the Times Colonist. Call 250-389-2138.