40% Faster Onboarding: Streamlined Trust Administration

40% Faster Onboarding: Streamlined Trust Administration

Executive Summary

New Horizons Financial, a leading wealth management firm, struggled with the lengthy and complex process of onboarding new trust clients, resulting in inefficiencies and client frustration. By implementing a digital onboarding platform, automating document collection, and streamlining communication, New Horizons Financial significantly reduced onboarding time by 40%. This transformation improved client satisfaction scores by 15% and freed up valuable staff time for more impactful client services.

The Challenge

New Horizons Financial manages over $750 million in assets, with a significant portion held in trusts. Prior to implementing a streamlined solution, onboarding a new trust client was a cumbersome and time-consuming process, averaging 6-8 weeks. This inefficiency stemmed from several key challenges:

• Manual Paperwork: The process relied heavily on physical paperwork, including applications, trust agreements, KYC (Know Your Customer) documents, and beneficiary designations. This required extensive printing, mailing, and manual data entry, leading to errors and delays. For example, a single trust onboarding package could easily exceed 100 pages, requiring multiple signatures and notarizations.

• Fragmented Communication: Communication with clients and internal stakeholders was often disjointed, relying on email threads, phone calls, and in-person meetings. Tracking the status of documents and outstanding requirements was difficult, leading to confusion and frustration. Imagine a scenario where a client had to resubmit a document three times due to missing information, extending the onboarding time by an additional two weeks.

• Lack of Transparency: Clients often felt left in the dark about the progress of their onboarding. They lacked a clear understanding of the required steps and the expected timeline, resulting in anxiety and dissatisfaction. This often led to an increase in support calls and emails, further burdening the firm's resources.

• Compliance Complexities: Trust administration is inherently complex and subject to rigorous compliance requirements. Ensuring adherence to relevant regulations, such as the Patriot Act and state-specific trust laws, required meticulous attention to detail and manual verification processes. A single compliance oversight could result in significant fines and reputational damage. The average cost of compliance-related tasks for each new trust client was estimated at $500, including legal review and documentation.

• Scalability Concerns: As the firm grew, the existing onboarding process became increasingly unsustainable. The manual, labor-intensive approach limited the firm's ability to efficiently onboard new trust clients and scale its business. They were projected to lose out on acquiring approximately $50 million in new trust assets over the next year due to onboarding limitations. This slow onboarding pace was creating a bottleneck that hindered growth and profitability.

The Approach

New Horizons Financial recognized the need for a comprehensive solution to address these challenges. Their strategic approach focused on digitizing the onboarding process, automating key tasks, and enhancing communication with clients. The decision framework involved a thorough evaluation of available technology solutions, a pilot program to test the effectiveness of the proposed changes, and a phased rollout across the firm.

• Digital Onboarding Platform: New Horizons Financial implemented a secure, cloud-based onboarding platform specifically designed for wealth management firms. This platform provided a centralized hub for managing client information, documents, and communication. The platform enabled clients to complete online forms, upload required documents, and track the progress of their onboarding.

• Automated Document Collection: The firm implemented automated document collection workflows to streamline the gathering of required information. The system automatically generated personalized checklists for each client based on their specific trust structure and requirements. Clients received automated reminders to complete outstanding tasks and upload missing documents. This significantly reduced the need for manual follow-up and accelerated the document collection process.

• Streamlined Communication: New Horizons Financial integrated its onboarding platform with its CRM system (Redtail CRM) to improve communication and collaboration. Automated email notifications were triggered at each stage of the onboarding process, keeping clients informed of their progress. Secure messaging features allowed for direct communication between clients and the firm's trust administration team.

• Enhanced Compliance: The onboarding platform included built-in compliance checks to ensure adherence to relevant regulations. The system automatically verified client information against sanction lists and flagged potential red flags. This helped to mitigate compliance risks and reduce the likelihood of errors. The firm also incorporated a mandatory legal review step into the workflow.

• Integration with Existing Systems: New Horizons Financial ensured seamless integration between its onboarding platform and its existing systems, including its CRM (Redtail CRM) and portfolio management software (Albridge). This eliminated the need for manual data entry and reduced the risk of errors. Consolidated account reporting through Albridge gave clients a clear and comprehensive view of their assets.

Technical Implementation

The technical implementation involved a phased approach to minimize disruption and ensure a smooth transition. The core components included:

• DocuSign Integration: DocuSign was integrated to facilitate secure electronic signatures for all required documents, eliminating the need for printing, mailing, and physical signatures. This reduced turnaround time for document completion by an average of 7 days. The integration utilized DocuSign's API for seamless embedding within the onboarding platform.

• Redtail CRM Integration: Integration with Redtail CRM allowed for automated client onboarding workflows and centralized communication tracking. Client data was automatically synced between the two systems, eliminating the need for manual data entry. Redtail's workflow automation features were used to trigger tasks and notifications based on specific events, such as document submission or compliance approval.

• Albridge Integration: Integration with Albridge provided clients with a consolidated view of their assets held in trust, including performance reports and account statements. This enhanced transparency and improved client satisfaction. The integration utilized Albridge's data feed to automatically update client account information on a daily basis.

• Data Security: The onboarding platform employed industry-standard security measures to protect client data, including encryption, access controls, and regular security audits. All data was stored in secure data centers compliant with SOC 2 standards. Regular penetration testing was conducted to identify and address potential vulnerabilities.

The calculations behind the 40% reduction in onboarding time involved a detailed analysis of the time spent on each task before and after implementation. For example, manual document review previously took an average of 4 hours per client, whereas automated review reduced this time to just 1 hour. The implementation team also tracked the number of client support calls related to onboarding, which decreased by 30% after implementation.

Results & ROI

The implementation of the streamlined trust administration process yielded significant results for New Horizons Financial:

• Onboarding Time Reduction: The average onboarding time for new trust clients decreased from 6-8 weeks to just 3-4 weeks, representing a 40% reduction.

• Client Satisfaction Improvement: Client satisfaction scores, measured through post-onboarding surveys, increased by 15%. Clients reported greater transparency, improved communication, and a more streamlined overall experience.

• Staff Time Savings: The automation of manual tasks freed up significant staff time. Trust administrators were able to spend an average of 20% more time on value-added client services, such as financial planning and investment management. This equates to roughly 8 hours per week per trust administrator, which can be directly translated into increased client engagement and revenue-generating activities.

• Cost Savings: The reduction in manual paperwork and administrative tasks resulted in significant cost savings. The firm estimated a reduction of $250 per trust client in onboarding-related expenses. This translates to an annual savings of $25,000, assuming they onboard 100 new trust clients per year.

• Increased Scalability: The streamlined onboarding process enabled New Horizons Financial to efficiently onboard a larger volume of new trust clients, supporting the firm's growth objectives. They were able to onboard 25% more clients in the year following implementation compared to the previous year.

Key Takeaways

For other RIAs and wealth managers looking to improve their trust administration processes, consider the following takeaways:

1. Embrace Digitalization: Transitioning from manual, paper-based processes to digital solutions is essential for improving efficiency and reducing errors.
2. Automate Key Tasks: Identify opportunities to automate repetitive tasks, such as document collection and compliance checks, to free up staff time.
3. Enhance Communication: Implement clear and consistent communication strategies to keep clients informed of their progress and address any concerns promptly.
4. Integrate Systems: Ensure seamless integration between your onboarding platform and your existing systems to eliminate data silos and improve workflow efficiency.
5. Prioritize Compliance: Build compliance checks into your onboarding process to mitigate risks and ensure adherence to relevant regulations.

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