Introduction

Globally, the leading wealth management firms keeps on transforming its client onboarding capabilities to elevate the customer experience. Seamless client onboarding remains at core of customer centric business model as it allows to drive business growth by attracting new clients and prospects. The key drivers that propel firms to continuously transform the onboarding experience includes change in customer preferences (mobile apps, self-service tools), demand for digital engagement (collaborative onboarding, eSignature), regulatory requirements (KYC, AML) and increasing pressure from non-traditional WealthTech players (robo advisor, brokerage platforms). Additionally, firms also aspire to optimize the operational cost by leveraging modern technology such as cloud-based open architecture applications, artificial intelligence, insight led intelligent operations.

Key challenges 

As per the industry study, it takes anywhere from 14 to 22 days of average lead time for onboarding wealth management clients. More than two third of clients abandons during onboarding due to poor digital experience. The key challenges faced by the clients, advisors and operation teams highlighted here.

• Clients

Clients gets repeated requests to provide same information across the multiple steps during account opening process. This complexity of the data and paperwork increases based on the account type (investment, retirement, trust) and service agreement with the firm (Advisory, discretionary management, managed portfolio, self-directed brokerage/ execution only). The lack of visibility on the status of onboarding process results in frustration and poor customer experience. Client also faces challenges in getting eSignature on the account opening documents. Due to prolonged onboarding process, clients fear on missing new investment opportunities.

• Advisors

Advisor spends lot of effort in absence of adequate digital onboarding tools. This results in manual data entry and re-entry across multiple applications and processes. Advisors have witnessed an increase in manual tasks in the backdrop of changing regulatory landscape. Advisor too faces transparency challenges and have no visibility into the current state of the onboarding process, primarily due to disjoint systems and operational processes. Advisors get extremely concerned by delayed client onboarding as it effects the account funding and investments flow.

• Operations

Operation teams are primarily using legacy based platforms and onboarding is still a paper-intensive process due to the long-standing preference for wet signatures and requires multiple approvals from different internal departments such as regulatory compliance, sales, financial crime. Operations deals with multiple legacy systems, processes and procedures duplicated for each siloed line of business and channel, leading to rework and inefficiency. Operations finds it challenging to monitor and coordinate with multiple systems and functions involved in onboarding process. It results in advisors waiting to invest client money until all the paperwork successfully processed by operations.

Way forward

Firms must study its current landscape and build a holistic view of different journeys taken by clients, advisors, and operation teams during the client onboarding process. Firms must look forward for building a fully digitally enabled end to end solution instead of an amalgamation of manual and automated process flows.

Firms must envision a fully digital platform that provides frictionless OMNI channel experience that support multiple lines of business, optimize common functions across different lines of business such as banking, self-directed brokerage accounts, digital advice, insurance, managed portfolios, in addition to advisor-led onboarding. It must offer digital capabilities such as NexGen mobile app, virtual digital assistant, engagement tools for collaboration, intelligent automation, digital vault to share documents in a secured manner (encryption, biometric, two factor authentication).

Firm must be able to leverage the onboarding application to improve the client lifecycle management and client centricity i.e., not just assisting new client onboarding but also managing existing clients as well. For example, secured digital vault enables clients to upload and instantly access all document from welcome kits to prospectuses to wills and enables to improve the client and advisor digital engagement.

The other areas that the new onboarding solution must consider are, leverage meta data across the applications, workflows, and processes to reduce data duplication and manual effort by intelligently pre-populating the relevant data elements. Application must have advanced dashboards to measure KPI, SLA and provide an accurate status of the onboarding process to all the stakeholders. Finally, application should be future ready and must have the flexibility to add new functionalities, scalability to process higher volume and agility to adapt to future regulatory changes.

Firms must evaluate build versus buy options based on its current landscape and gaps against the capabilities required for target state. Firms must adopt the build approach in cases where most of the required business capabilities are already present and needs to be stitched together to develop a fully digitally enabled solution. Firm must explore the ecosystem players to add niche capabilities and look forward for fintech partnerships (eSignature, digital vault, co-browsing). It allows the firms to build a custom-made application using various competitive capabilities from multiple partners.

Scenarios where firms have significant gaps in current capabilities then it must explore the different product vendors to reduce the time to market. The client onboarding solutions are offered by wealth management platforms, niche onboarding vendor, CRM systems and low code no code platforms.

Firms must reimagine the onboarding solution in context of emerging technologies such as GenAI and leverage its capabilities in a meaningful manner. For example, Trust account opening requires lot of documentation and operations teams spend lot of effort to validate it. GenAI capabilities of content summarisation can be harnessed for the document verification process to fast-track the onboarding. Similarly, GenAI conversational capability can explored for building the virtual digital assistant and enrich the digital experience.

Industry leading examples

• Merrill lynch launched a Collaborative Onboarding Experience platform (COBE) to streamline and fully digitize the client account opening and onboarding experience. Primarily, it simplifies onboarding process and integrates account types across the wealth divisions. It is an end-to-end digital account opening platform that allows financial advisors to collaborate digitally with their clients to open multiple accounts in a single, guided workflow. It also eliminates redundant processes like setting up beneficiaries or e-delivery preferences, thereby allowing the advisors to spend more time with clients.

• Schwab Advisor Services upgraded its industry-leading digital onboarding solution, allowing advisors to open and fund up to ten new client accounts in one “digital envelope,” which clients can authorize with just a few clicks on their desktop or mobile device. It simplified the onboarding process by allowing advisors to open multiple accounts, tailor them to their clients’ needs, and fund them — all in a single, fully digital workflow accomplished with one email to their clients. The advisors can upload up to sixteen commonly used firm documents, such as welcome letters, advisory agreements, and regulatory disclosures, for new clients to view, edit, acknowledge, and approve.

• Lloyds Bank launched UK first in-app passport scanning for client onboarding. The mobile app uses Near Field Communication (NFC) technology to scan the chip embedded within the passport. The new feature helps to speed-up the ID verification process by pre-populating key data fields including name, title, date of birth, gender, and country of birth.

Conclusion

Firms must accelerate its client onboarding transformation journey to elevate the customer experience by offering superior digital experience and compressing the onboarding cycle, to increase advisor effectiveness by equipping them with collaborative digital tools, improvise operational efficiencies to enable quicker account funding, asset transfer and investment flow. As an outcome of seamless client onboarding experience the wealth management firms will benefit from cross-selling opportunities. As the firms focuses upon intergenerational wealth transfer having the fully digital onboarding solutions is imperative to make best in class first impression on nextgen customers.