Any advisor who has gone through the process of allocating client assets to an alternative investment knows that NIGO errors can be a huge pain in the neck. With complicated, lengthy subscription documents, completing a subscription correctly the first time can feel like an impossible task. Some industry participants estimate that between 30% and 60% of subscription documents have errors when they are submitted and must be corrected before an investment can be completed.
Many NIGO errors are the result of an omitted field or an incorrect data entry. However, Altigo, a new straight through processing platform for alternative investments, uses behind-the-scenes automation to make the subscription process easier than ever. Altigo is able to mitigate these issues with 2 important features: business rules and verification checks.
When filling out subscription documents, advisors must take into account what type of investor their client is. For example, a client may invest as an individual, as an entity, or with a qualified plan. Depending on which one they choose, the document may have some sections that are relevant and need to be filled out while others are not and can be left blank. However, determining which sections are relevant and which are not can be confusing, and it is easy to miss a section or even a single field that is required to complete an investment.
Altigo takes the guesswork out of the process by only presenting fields that are relevant to the investor at hand. Once an advisor selects the investor type of “individual” for example, only fields that are relevant to an individual investor will be presented to be filled out.
An investment document may also have duplicate fields, i.e. more than one place in the document where the same information must be re-entered. If those entries do not match, then a NIGO error can be triggered. With Altigo, the information only needs to be entered once. The data is then automatically mapped to the subscription document, placing the entered information everywhere it needs to be, eliminating the possibility that they do not match.
Sometimes all the correct fields are filled out, but the wrong information is entered. This can be because of a simple typo, or miscalculation. When working on paper subscription documents, those errors can slip through the cracks and not be noticed for weeks as the documents are mailed back and forth between the advisor, investor and sponsor. Once the mistake is identified, the process has to start over with the correct information.
Altigo checks information as the advisor enters it. If they enter a number of shares, Altigo will verify that it matches the dollar amount of the total investment based on price per share. When entering a mailing address, Altigo can ensure that the entry can be located on a map. If the data cannot be verified, Altigo will alert the advisor right away so that it can be corrected before moving along in the process.
With the help of these 2 automation tools, Altigo can dramatically reduce NIGO errors and save advisors from hours of rework.
Disclaimer: WealthForge provides this information for educational purposes only. It should not be construed or relied upon as legal or tax advice.