Why Human, Tech Skills Are Both Critical: David Knoch

In the interview, Knoch explains, "We're building a back office ecosystem from the core of what we had" before he came on board. A leader in cloud-based digital automatic operations software, Docupace's overarching goal since 2002 has been to do away with paperwork. 

Going paperless and storing documents in the cloud save advisors time and money, plus provide document security. In 2021, Docupace saved, through automatic digitization, more than 291 million hours in processing time versus manual operations, the firm says.

It serves as the back office for broker-dealers and RIAs, also supplying them with the integrated technology itself. Part of Knoch's strategy has been the 2021 acquisitions of two firms, jaccomo and PreciseFP, to expand and increase Docupace's capabilities.

Knoch was previously president of 1st Global, a research and consulting firm. He continues as president of Preston Creek Capital, a consultancy to the financial services industry.

ThinkAdvisor recently interviewed Knoch, speaking by phone from his Dallas base. Commenting on what makes a great advisor and leader, he said, "If you don't have empathy, connectivity and human understanding, it doesn't work well." 

Here are highlights of our conversation:

THINKADVISOR: What do you consider the financial services industry's biggest challenge?

DAVID KNOCH: The industry doesn't really "get" the demographic composition of America. The industry is still overwhelmingly male and Caucasian. There's a lot of work ahead of us with regard to diversity.

What are the benefits of having the industry represent the country's entire racial, ethnic and gender demographics?

The quality of advice goes up when multiple cultural and gender perspectives are brought into the planning conversation.

There are segments of certain communities that might feel better served by someone from their own community. It would be good to make sure they have that choice. The provision of advice is better if there are multiple perspectives involved.

What's the biggest challenge for financial advisors at the moment?

Advisors have probably gone through a business transformation. Maybe they're fee-based now, or if they're a hybrid, they're probably more fee-based than they had been. They likely do financial planning more often.

But advisors are probably saying they're not confident using the new [tech] tools well. That's a big challenge to them.

Yes, but most of the time it's not the advisors themselves who are using the technology hands-on — meaning administrative employees.

That execution is part of a wealth management firm. If the financial advisor hasn't given their team the tools and capabilities to execute well, it's still their responsibility, even if they're personally not doing all of the execution.

Docupace has been on "a mission to eliminate paperwork since 2002," the firm's website states. For decades, people talked about the paperless office, but as more of a fantasy.  How much of a reality is it today?

It's still a little bit of a fantasy in some segments of our industry. You'd be shocked that there are segments that are still incredibly analog. A surprising amount of manual work is [still] being done. 

But that's great for us. Fortunately, [paperless] is a reality for anybody who wants it. We're digitizing everybody as fast as we can to give them and their clients a better experience.

Are there many financial advisors who simply resist changing over to digital from analog?

That's becoming rarer and rarer all the time. But certainly, there's that contingent of advisors, especially those who see retirement in their windshield in the next three years or so.  Others may lack the resources to initiate it.