Automated Subscription Agreements: Transforming Fund Management

Automated Subscription Agreements: Transforming Fund Management

Fund management is highly technical and often involves several new fund openings every year. Most fund managers run their businesses with small teams, and the relationship with their investors is more important than anything else. 

Whether it's for returning clients or new opportunities, a smooth subscription agreement (sub doc) process is paramount for individuals and wealth management offices investing large sums of money into a fund—the subscription process is the formal introduction and first technical experience a client will have with the new product. 

Like most onboarding in the asset management industry, the traditional subscription agreement process was executed via paper forms. This severely limited the potential pool of investors and cheapened the experience of joining a fund.

As the world evolved, digital forms were introduced, but client experience issues persisted, with complicated back-and-forth emails, follow-ups, and security issues.

This article will explain the evolution of automation in subscription agreement processing, the various benefits of digital onboarding, and demonstrate the Mako Fintech process for fund management.

Workflow Automation in Subscription Document Processing 

Subscription agreement automation is useful in two main scenarios. The first is closed funds like venture capital and private equity. The typical client for this type of fund is either an institutional client, like a pension plan or Fund of Funds, or a high-net-worth individual (HNWI) signing up for themselves. Particularly where the client is an HNWI, the automation of the onboarding process ensures a smooth experience and a guided flow to respect their valuable time. 

The other scenario involves open-ended funds like REITs, hedge funds, and private mutual funds. In this case, wealth management advisors sign up all or a large portion of their discretionarily managed clientele, which results in massive amounts of data to process. A digital onboarding platform like Mako can integrate with customer information (CRM) databases to prepopulate as much client information as possible and sync the closing data with external systems to greatly simplify the administrator's monthly closings. 

In both situations, automating the subscription agreement processing leads to substantial cost reductions in labor, time, and resource allocation. A platform like Mako also dramatically reduces human errors while speeding up data entry and verification processes.

How Automation Transforms Subscription Document Processes

Automation in fund management considerably reduces the risk of fraud, money laundering, and data leakage while harmonizing the onboarding journey into one unified platform. Mako Fintech allows you to integrate KYC checks directly into your digital onboarding process, ensuring the utmost levels of security for your firm while providing a seamless experience for your customers. 

Not only is this process essential for regulatory compliance, but it provides easily auditable records that can be refreshed as needed. KYC refresh processes often take months and require dozens of employees, but they can be completed in a few clicks with a digital onboarding platform. 

Moreover, digital onboarding allows many fund managers to grow and scale their funds or open new lines of business. Small fund managers can now handle a larger clientele and work with big wealth management firms without being overwhelmed by the amount of data that entails.

Case Studies: Success Stories in Fund Management

Vision Capital Corporation (“Vision”) is an alternative investment fund manager specializing in publicly traded real estate securities. Vision manages the Vision Opportunity Funds (the “Funds”), which are real estate-focused alternative investment funds aiming to perform in various market conditions while targeting low volatility with downside protection.

Previously, investors seeking exposure to the Funds had to complete subscription agreements and KYC forms manually. However, Vision has now implemented a digital onboarding system that streamlines the subscription process. This allows investors to subscribe to the funds more efficiently, either directly or through their advisors.

“Mako’s digital onboarding platform has streamlined our team’s operations by eliminating manual paperwork. With its validation checks in place, the platform ensures that the information investors provide is accurate and complete. Additionally, Mako provides secure document management of the subscription, KYC and tax documentation. This has significantly reduced the time our team spends following up on incomplete or inaccurate information,” notes Vinh Truong, Vision’s Chief Operating Officer & Chief Compliance Officer. 

Enhancing Client Experience and Satisfaction

Since the execution of the subscription agreements is only one part of onboarding a client onto an alternative asset platform, a flexible digital system that integrates fund closing together with KYC and custodial account opening provides a unified client experience that is orders of magnitude superior to forcing the client to go through multiple disconnected workflows. 

When designing your client journey, be sure to intentionally plan the process so that clients are guided through their onboarding, and all information gathered is used to shape the next steps.  

Although much of onboarding involves filling out forms, it’s also important to provide the user with a welcoming and intuitive user interface and experience, an aspect that has been too often overlooked in this industry. Mako takes pride in its intuitive and easy-to-grasp UI/UX that any customer can start using without any further assistance. 

Automated subscription agreements are also a great way to integrate with the rest of your tech stack and develop a better understanding of your own firm’s operations. By integrating with business intelligence tools, digital onboarding systems can enable a fund manager to determine where subscribers are dropping off or where their operations teams can become more efficient, ultimately developing a better understanding of the ROI of their operations.

Embracing Efficiency: How Automated Subscription Agreements Revolutionize Fund Operations

Whether it's for a few high-net-worth individuals or hundreds of clients in your advisory practice, opting for automated subscription agreements is a seminal decision for any fund manager or advisor. Not only does it benefit your business operationally, but it also sends a strong message to potential clients that you take their user experience seriously. 

Digital onboarding platforms like Mako are great ways to grow your business by easing the operational burden of launching a fund and making the experience of attracting new investors easier and more welcoming. At the end of the day, good fund managers don't fail to grow because of their investments; they simply lack the business processes to keep growing past a certain point. 

Embracing technology is one of the best ways to create new business avenues in the world of fund management, and digital onboarding acts as the bridge between all the tools you need to utilize your client data to its full potential and create the best experience possible for your clients, your team and yourself. 


If you're ready to elevate your fund operations, don't hesitate to contact us for a demo.

Photo by Jason Dent on Unsplash

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