Docupace: Secure Digital Operations Platform for Broker-Dealers

Docupace aims to simplify operations in the highly regulated business of wealth management, which is bound to red tape burden, oversight, audit, retrieval request, etc. The company digitizes operations for wealth management firms providing smooth integration of their technology into one digital environment.

To meet with Mark Tapling, CEO at Docupace, I started out for Los Angeles, where their office is situated. This place is teeming with huge business centers and hosts a number of big-name offices. In one of them, at Wilshire Boulevard, we discussed the company’s structure, activities, offerings, and technical details, and the prospects of the market.

Mark is a great conversation partner and a notable expert. His track record includes 18 years in CEO positions in the technology business and SaaS market. He joined Docupace team as a board member two years ago, and was then supporting the company in a consulting capacity for seven months before being appointed as CEO in April 2018.

Michael Pinsker, the founder and the Chairman of the board at Docupace, is actively involved with the organization and is critically important to its business growth. Bringing Mark in as a CEO enabled Michael to dedicate more time to his vision and leadership of the product and strategy, which has been quite successful in the market.

The concept

Wealth-management businesses have specific operations that are heavily bound to rules and security. Each company faces the need to organize document management and operations in a safe and compliant way, and each does this their own way. Such variety causes problems during integrations and acquisitions.

“The customer has to decide, ‘do I have to take on the responsibility of being the systems integrator or would I rather hire a firm that specializes in it?’”

Over the years Docupace transformed from a cloud-based enterprise-grade workflow and document management platform to the universal digital-operations platform specifically for wealth-management companies that is easy to integrate with any company and the platform that positions firms to be able to adapt to changes in regulation, and that ensures predictable deployment. Docupace implements such a platform to financial services firms including but not limited to top broker-dealers in the industry. In many cases these companies have grown their business through acquisition, so every time they acquire an organization, they also acquire that organization’s technology stack, infrastructure, and all the other component pieces. Those customers are looking for a backbone that will enable them to digitize the operation, and Docupace perfectly suited to the task.

“We work with our clients to lay out a digitized operation that takes them from coast to coast and is optimized for their model of doing business.”

Noncontroversial integration with SEC/FINRA compliance

Client centricity is one of the Docupace core values. It has been driving force behind innovation that Docupace produced in order to satisfy all the needs of their customers. This innovation led to Docupace developing and implementing a wide range of solutions, such as Straight Through Processing (STP) account opening and maintenance, client onboarding, forms management, digital signatures, data management, alternative investment solution, and production reporting. These solutions are built not only on a core Docupace platform, but include following key elements:

• Data center. Docupace have partnered with Switch Communication in utilizing their tier 5 gold certified Data Centers in Nevada, which are a highly secure facilities. At the physical security level, they have military veterans with war experience guarding physical access; at the infrastructure level, they have unprecedented bandwidth connectivity coupled with the best security practices. Also, Nevada has the lowest incidence of natural disaster.
• Fast start. The deployments for platform products have a reputation for being painfully and notoriously slow. Fast start is a predictable deployment process performed by experienced Docupace professional service team that allows the delivery of 50% of the value to the customer in the first 30–45 days.
• On-demand integrations. Docupace use RESTful API and proven practices to implement integrations quickly and in a fully compliant manner.

“We position ourselves as the most robust digital-operations platform for broker-dealer operations. Our strategy is [that] we will integrate what you tell us is strategic, and we will automate what you tell us is either bound or less than secure or less than efficient.”

• Transition assistant. Industry metrics for the past five years show that, on average, approximately 4,000 advisors move from one firm to another monthly. The service provided by Docupace codifies the paper trail and automates the process.

“It’s a highly regulated, structured process for moving your book of business and assets under management with a whole series of requirements. Basically, it culminates in the execution of a U4 document, which will enable the next broker-dealer to take on that advisor’s book of business and reduces the transition process by 30 to 60 days providing faster payouts to the transitioning advisors.”

• FINRA/SEC Compliance focus. Docupace have a significant infrastructure that ensures compliance. For instance, They support SEC/FINRA regulations; in particular, such rules as 17a-3 and 17a-4. With many industry experts on staff, Docupace understands the importance of regulatory compliance tailors its offerings to accommodate compliance needs of wealth management firms.

Below, we’ll take a closer look at how they have managed to implement these great features.

Docupace: Insider’s look

Despite Mark being a non-technical and having only become CEO this April, he shared many details about the technical implementation of Docupace.

Integrations and APIs

As Docupace has been built to be the driving backbone for digital operations, the company accepts requests for integrations from both customers and partners. There are several kinds of integrations, as follows:

• a shelf product, which is a third-party partner that has a business around delivering a particular kind of product;
• the STP integration with clearing houses, custodians, or product manufactures like mutual fund companies or insurance carriers.

Among the products the company integrates with are Salesforce, Redtail, Smart Office, Envestnet, AnnuityNet, MorningStar, Caesar, M&O and number of others. On a STP integration side Docupace works with Pershing, NFS, TD, American Funds to name a few.

“Now, the reality is we get more requests for the popular products and fewer requests for the niche products, but there are AI investment-platform products and other things that can be integrated on request.”

The company don’t necessarily publish their APIs or put them on a website for anybody to write into it. Instead, they cooperate with clients and integration partners to deliver best user experience via the integration before providing them with the API.

Team structure

The team structure of Docupace consists of over 100 employees, and has numerous branches:

• Product organization, which consists of an outward-looking team that determines the value proposition, the use case, the critical compliance elements, the experience that they are trying to deliver, etc., and an internally oriented team that takes those specifications and converts them into engineering sprints.
• An engineering team, which conducts business analysis and development.
• An architectural team, which is focused on defining the fundamental base architecture of the platform.
• Site Reliability team, which loads these products into a test environment and then into production to maintain the highest level of reliability and availability of the platform.
• The platform organization, which is responsible for all of the hardware and network infrastructure that is used to deliver the service and capabilities to the customers—servers, internet connection, security products, failover, redundancy, database, and so on.
• The marketing team. The team is responsible for communications and demand generation.
• The sales organization, which looks for direct sales. This contains a sub-team dedicated to building partnerships and arranging integrations.
• A professional services team, which is responsible for smooth delivery and configuration of the platform for new and existing customers.

“Lots of the stuff is not building new code. It’s turning knobs in the configuration because the broker-dealers have prided themselves in many cases on having a unique twist on a common process.”

• The customer care team, which provides quick responses to customers.
• The finance team, which manages payroll, collects invoices, and pays the bills.

Architecture and tech stack

Mark says that in the architecture they don’t have any components that nobody wants. They are a Java shop using containers and RedHat for their management. Also, they use Oracle databases, EMC storage, and virtualization.

“Architecturally, we were always built to engage integration. So we do that as a matter of design. So you don’t have one monolithic mountain of code that has no entry points and you have to constantly be building onto it.”

Product management

In addition to their own leadership, Docupace asks clients to give feedback and suggestions.

“No one wants to give up on performance enhancements and no one says, ‘Hey, you can’t outsource your leadership to us.’”

Among their competitive advantages in design thinking are vertical knowledge about the industry, and persona modeling.

In terms of deployment, they are agile and practice Scrum. They decided to move to a tri-annual release schedule.

Future plans

According to Mark, small companies often struggle to both make a profit as broker-dealers and support the advisors, this is why digitizing their back-office could have been quite profitable for both these 35,000 companies and Docupace.

“That target market looks like an iceberg. That’s the piece of the iceberg that’s at the top and above the water—that’s only 100 of those firms. Beneath them, there are another 100–900 broker-dealers, which have somewhere [around] 50 to a 1,000 advisors under their umbrella. […] Then the next layer down is small broker-dealer[s] with three to five to ten [advisors]—that’s the most fluent one.”

Also, they strive to work on compelling offerings that promote advisor adoption such as ease of user enhancements, product capabilities for them to conduct business in a simplified fashion.

Takeaways

Docupace has everything necessary to build strong relationships with clients and deliver a great product. I want to thank Mark for sharing his valuable thoughts about the industry and about Docupace, and I hope they overcome all the challenges they’re facing.

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