As everyone in wealth management knows, the onboarding process is the first step towards a great client relationship. If all goes well, it builds the foundation for a long and mutually beneficial future for the client, advisor and firm. Because the onboarding process really begins with the first contact with an advisor, a negative experience could make a bad first impression, or, worse, cost you the client.With the unprecedented change in industry regulation, firms are rapidly outgrowing legacy onboarding capabilities. And, as the digital world advances, so do customer expectations. These factors make the onboarding process ripe for transformation. But, what does a good onboarding solution need to include in this complex landscape?
We’ve done some research and talked to our clients and other industry experts and come up with this list of key trends affecting wealth management onboarding right now:
#1 Evolving Client Demands – As we mentioned above, today’s clients expect seamless onboarding experiences, which includes the ability to interact with their advisor or advisory firm any time, on any device and in any location. These empowered clients expect an onboarding experience that is personal, transparent and backed by seamless technology at every touchpoint. They don’t have the time or desire to complete physical paperwork—it needs to be quick and easy.
#2 Express Account Opening – Similar to the first point, today’s clients (and firms) want an express account opening process. We’ve seen this particularly with our TAMP (Turnkey Asset Management Program) customers. These (and other) firms need to condense the laborious data collection process into a smaller subset of minimally required data, so that accounts can be opened faster.
#3 Support of Multi-Custodian/Tenant – Another trend deeply affecting the TAMP sector is the need to provide onboarding solutions that will accommodate multiple introducing broker-dealers, as well as multiple clearing firms and their systems of record. What’s more, they need to have the ability to manage this multi-tenant environment within one platform and through one seamless onboarding experience. Firms also need to be able to customize the onboarding experience based on their own unique needs, including documents, workflow and firm-specific system integrations.
#4 API-Driven – Speaking of integrations, we’re seeing more and more requests for API integrations. This allows firms to connect their onboarding systems to other technologies they use, such as CRMs, financial planning tools, proposal systems, account funding, document management and electronic signature vendors.
#5 Importance of Data – One of the most intriguing trends in onboarding is the role of data, the kind of basic data (like demographics, as an example), that can be very informative for the advisor and is used across the entire onboarding process. This information can be very useful to the advisor, enabling them to provide more accurate, personalized financial guidance.
#6 Fiduciary Rule – A blog post about onboarding trends in 2017 wouldn’t be complete without a mention of the DOL Fiduciary Rule. Client onboarding is an integral part of fiduciary rule compliance. Onboarding, viewed holistically, is an ideal place to include the layer of financial planning and portfolio construction to ensure that the advice provided is in the client’s best interest. This new holistic approach of onboarding also lends itself to better client experiences that we will explore in an upcoming blog post.
#7 Household Approach – When bringing on new clients, firms should be focused on the entire household, rather than a single account. This approach not only makes it easier to open multiple accounts in one user experience, but it provides the advisor with a better understanding of the entire household for planning and advisory purposes.
#8 Integrated Client Onboarding Experience – We will explore this one in-depth in an upcoming blog post—and we mentioned it some in trend # 6—but there is an overwhelming shift towards integrated client onboarding experiences. In the past, firms have viewed the client onboarding process as a standalone process. Today, firms are taking a broader, client-centric view of the onboarding process.
If you're interested in learning about how IFS is addressing these trends head-on, or want to discuss your own onboarding challenges with us, email us to schedule a consultation.