10 Essential Documents Every Financial Advisor Should Have in 2024 

Keen to improve your document processes? 

Well, the first step to effective document management is knowing what to keep. 

When you fail to create and track the right documents such as certifications, licenses and proposals, your business may struggle to attract clients. 

Unfortunately, an FPA survey revealed that 96% of financial advisors struggle to win over their ideal clients. This becomes even harder with poor documentation.

If you’d like to make your business more appealing to prospects, then you need to learn about key essential documents for financial advisors like certifications, which can help substantiate your expertise and improve business credibility. 

With other well-written documents like a financial services proposal, it also becomes a lot easier to reach the right prospects and attract new customers for your firm.

If you’d like to learn about legal records that are also crucial to keep, check out this article I wrote about essential legal documents for small law firms.

In this article, we’ll discuss essential documents every financial advisor should have in 2024 to streamline client acquisition, business growth and regulatory compliance. 

Let’s get started.  

1. Financial services proposals

What pitching strategies do you use for your business? 

In order to keep your firm healthy, generate revenue and even accelerate expansion, you need to have a strong client acquisition strategy in place. 

If you’d like to stand out and win more business in the highly competitive industry of financial advisory,  you need to write compelling proposals. 

A study by Broadridge established that 58% of advisors said they’re focusing on improving customer acquisition by using various strategies to stand out. One way you can do that is by writing excellent financial services proposals.

When well-drafted, this document can help you win clients so you should add it to your financial advisor document checklist. 

In order to boost success, you need to send personalized proposals to prospects consistently, so I suggest using a document management system to create a template. 

Boost your productivity by starting your free FileCenter trial to create  a customizable proposal template. This will enable you to draft and personalize proposals quickly to address unique client needs & help you win more business.

When drafting your proposal, remember to include a brief introduction of your business, and also identify a particular problem that you’d like to help them address. 

A client-winning proposal should also be straight to the point, use easy-to-understand language and also be well-structured so that it’s easy to skim through quickly. 

2. Financial advisor forms 

A financial advisor form is another crucial document. 

It’s a form that your potential clients fill out, providing their contact information and highlighting the nature of financial advisory services that they’d like from your business. 

Financial advisor forms are vital screening aids, enabling you to qualify clients so that you don’t take on customers who want services you don’t offer. 

A survey by Integrate discovered that 40% of all leads are low-quality. So in other words, for every ten prospects you’ll get for your financial advisory businesses, chances are four of them will not be the right fit. 

This is where financial advisor forms come in, helping to ensure you don’t waste resources on unsuitable prospects. 

So how do you create effective financial advisor forms? 

It’s important to include entry fields for not just contact information, but even the specific nature of services you offer so that you can establish whether a lead is worth pursuing. 

You can even go a step further and create forms specific to certain services. For example, if you help improve small business bookkeeping primarily through tax preparation, you can create an advisory form that’s very specific to this service. 

This can contain fields for extracting important information such as the size of their business, their annual turnover and more to help you prepare for an initial meeting. 

3. Finance invoices 

Can you classify your billing process as efficient? 

As a financial advisor, you probably work with several different clients, each having their own unique billing cycles and rates that can all be difficult to keep your eye on. 

When your billing processes are cumbersome and ineffective, you may experience very long payment cycles that cripple your business. 

This is a problem affecting 3 in 4 SME owners, according to a recent survey by Upflow. When you don’t receive payment on time, this constricts your cashflow and puts a huge financial strain on your business. 

So I recommend adding invoices to your financial advisor document checklist to help you get paid on time. 

If you’d like to improve your productivity when it comes to meaning your billing processes, you should consider top document management tools that integrate seamlessly with QuickBooks, more so if you rely on this accounting solution. 

These platforms can help you avoid the manual data entry burden that comes with QuickBooks, while enabling you to create a standard template to use for all your billings.

When creating your template, it’s important to include information such as the client and business information. It should also describe services rendered, their costs and payment terms and have a unique invoice number to make it easy to track payments.

4. Confidentiality agreements 

Confidentiality agreements protect your client’s privacy. 

While you’re already bound by various professional and ethical standards of the financial services industry, confidentiality forms are still key essential documents for financial advisors because they give your clients peace of mind. 

Without confidentiality forms, doubts can fester about whether you’ll disclose a client’s sensitive information like investments, incomes and expenses. 

A survey by YouGov unearthed that 60% of Americans prioritize that trust and confidentiality as top factors when choosing financial advisors. So these documents can give you the edge over your competitors and help you win more business. 

But how do you create an effective confidentiality form? 

It should first of all contain elaborate details that identify the client, as well as your information as the advisor providing the service. 

What’s more, it should also detail the reason for the agreement, which explains why you need the shared records. In order to protect private information, the agreement needs to also define what exactly you shouldn’t disclose. 

For example, this data could be about tax information, if you’re offering tax advice or an investment portfolio if you’re aiming to assist a client with their investment decisions.

Other important elements of an excellent confidentiality agreement are clearly assigned responsibilities to the receiving party and well-defined consequences for disclosure. 

5. Price quote forms

So how much do you charge for your services? 

This is probably one of the most common questions that clients ask you during your initial meeting, and most advisors tend to want to keep this under wraps until they’re confident they’ve sealed the deal. 

However, when you’re not transparent about pricing, you may waste resources on a prospect who may eventually back out if they believe they can’t afford you. 

A study by Cerulli Associates revealed that 46% of clients greatly value cost transparency in a financial advisor. In fact, for the majority of them, not disclosing fees upfront is a deal breaker that makes them reassess their options. 

A price quote form greatly reduces uncertainty for clients, which is why I’ve also added it to our financial advisor document checklist since it can help get deals over the line. 

Fortunately, creating a quote is a straightforward process to carry out and you should begin by using the best FileCabinet CS alternatives to create a quote template. So you’ll only need to recalculate totals for each client depending on services they need. 

In terms of elements, the quote should include your business’s and client’s names. 

It should also have a unique quote number, and a description of the cost of services that your financial advisory practice offers to establish expectations for compensation. 

6. KYC documents 

The financial services industry is highly regulatory. 

As a financial advisor, you’re required to meet certain standards whenever you bring new customers onboard. This includes Know Your Customer or KYC requirements, which mandate that you verify client’s identities. 

So failing to obtain and secure the appropriate KYC documents for your new clients can attract regulatory risks for your financial advisory firm. 

A survey by FundsNetwork found out that 89% of financial advisors rate compliance and regulation adherence among the top three challenges they face. One key contributor is strict anti-money laundering policies that require you to collect extensive client data. 

This is where key essential documents for financial advisors like KYC documents come in. 

So what KYC documents do you need to gather? 

They include  bank statements, driving licenses and identification cards, which can help identify clients accurately and avoid accidentally helping them to commit fraud. 

When you collect KYC files, however, you now become subject to various data privacy laws, which is why I recommend using digital document management solutions to secure your client’s information. 

Protect sensitive financial data by beginning your free FileCenter trial to gain access to vital document security features for safeguarding sensitive information. 

For example, you’ll get PDF redaction for hiding confidential information within KYC documents and advanced permission controls to restrict access to customer data. 

7. Investment documents 

Do you provide investment advice to clients? 

If that’s the case, investment records should also be in your financial advisor document checklist, because they can greatly assist when it comes to due diligence. 

If you don’t have the necessary investment documents, it can be challenging to assess risk tolerance and help your clients make the right investment decisions.

A survey by Morningstar showed that 60% of investors value an advisor’s expertise and knowledge in investment and financial planning. In fact, it is the most important attribute that they examine when choosing a financial advisor. 

But in order to grow your investment knowledge and provide sound advice, you need to secure the right investment documents.  

There are a number of records you may need depending on the nature of investments that you handle for your clients. 

For example, you may need to look at crucial small business documents such as finance records & balance sheets to understand the financial health of their company. 

Various estate documents can also shed light on how your client has distributed their assets so that you can provide advice on suitable investment strategies. 

When you manage several client portfolios, each entailing a collection of various investment documents, you can easily mix things up. This is why I recommend creating a centralized repository, and arranging these files by client matter to increase efficiency.

8. Advisory agreement 

An advisory agreement is part and parcel of advisory workflows.

In fact, it’s one of the key essential documents for financial advisors since it defines your legal responsibilities toward the client and stipulates what you’ll do for your clients.  

The absence of a well-written financial advisory agreement can lead to unrealistic expectations, which can eventually result in frustration for both parties. 

This is a significant problem today, given that 29% of advisors confessed to being worried about clients having unrealistic expectations of their services. In particular, these concerns largely revolve around customers expecting illogical returns. 

It is for this reason that you need to draft an advisory agreement to help manage client expectations.

So what are some crucial elements of an excellent agreement?

The scope of work or engagement is an integral component and it defines what services you’ll offer to your clients. It needs to also stipulate the terms of service, which should define clear start and end dates as well as renewal and termination conditions. 

Some clients may also request that you include a limitation clause, which is commonplace in many legal document management workflows. It essentially restricts your ability to work with certain companies for the duration of the contract. 

A great agreement should also contain a detailed compensation plan, which describes the amount you’ll be paid, payment methods, and the schedule of payments. 

9. Tax planning documents 

So what are some crucial tax planning documents?

Well, the most common ones are income statements and receipts, which enable you to track the expenses of and income of your financial advisory business.

Without the right tax planning files, you may not be able to report taxes accurately, leading to an impromptu tax audit and potential penalties. 

A survey by Thomson Reuters discovered that 72% of businesses faced a tax audit in 2023, which resulted from tax authorities suspecting they weren’t accurately reporting taxes. This is a situation that was contributed to by poor expense tracking. 

So tax planning records also make it on our financial advisor document checklist because of this.

That said, it’s important to organize and track your income and expenses strategically in order to prepare taxes accurately for your business. I also recommend classifying receipts into intuitive categories. 

Errors can often arise when you manually perform data entry, which is why I recommend using an OCR-driven document management solution to automate this. 

Increase productivity by starting your free FileCenter trial to digitize receipts and automate data entry. With our software, you can even automatically route and classify receipts into appropriate categories depending on what’s taxable. 

By digitizing your receipts and making them searchable, you’ll also be able to unearth important information to help you pass financial audits and ensure compliance. 

10. Qualifications & certifications

Your professional qualifications speak volumes. 

Alongside certifications, these documents essentially substantiate your expertise as a financial advisor, enabling you to build trust and credibility in your industry. 

If you lack various qualifications and certifications documents, clients may doubt your proficiency and they may eventually decide to go with other options. 

In fact, 27.1% of potential clients assess professional qualifications & certifications when choosing a financial advisor, according to a study by the American College of Financial Services. This makes it one of the leading factors that your prospects prioritize. 

If you’d like to win more business, you need to secure your qualifications and certifications and make them easily shearable with new prospects. 

So what exact qualifications are prospects looking for in their advisors? 

One of the most basic concerns that they have is whether or not you have a university, college or high school diploma. I suggest digitizing these records so that they’re easy to share using small business document management software with client portals. 

Doing so will also create vital back up copies in the cloud in case you lose the originals. 

In addition to qualifications around education requirements, your clients would also like to know whether you have a professional license that proves your credibility. They also consider industry certifications that also demonstrate your skills and expertise. 

Conclusion

A great document workflow is essential. 

However, when it’s extremely inefficient, it quickly transforms from asset to liability. 

When you spend too much time on document work, you may have very little time left to focus on client-facing activities, and building strong relationships. 

A JD Power survey revealed advisors spend 41% more of their time on administrative tasks than professionals in other industries. Iterative and highly manual document processes are a big part of this problem. 

In order to maintain key essential documents for financial advisors efficiently, you need to embrace automation technologies. A great document management software, for instance, can help you take back valuable time that you can use to grow your business. 

If you’re ready to improve productivity, sign up for your free FileCenter trial to get advanced document automation features. These will help you reduce your administrative burden so you can focus more on growing client relationships.