98% Retention: White-Glove Onboarding Eliminates Early Churn

98% Retention: White-Glove Onboarding Eliminates Early Churn

Executive Summary

Granite Peak Advisors, a growing RIA firm, faced a persistent challenge of early client churn, losing approximately 3% of new clients within the first 90 days of onboarding. To combat this, they implemented a comprehensive "white-glove" onboarding program that prioritized personalized communication and proactive support. This initiative leveraged technology to streamline the process and dramatically improved client satisfaction, resulting in a surge in client retention to 98% and the virtual elimination of early churn, safeguarding approximately $15 million in potential AUM loss annually.

The Challenge

Granite Peak Advisors, managing over $500 million in assets, experienced steady growth in new client acquisition. However, a concerning trend emerged: a noticeable percentage of new clients were churning within the first three months of onboarding. While the firm excelled at attracting new business, retaining these clients long-term became a critical focus.

Specifically, Granite Peak observed that approximately 3% of new clients, representing an average of $500,000 in assets under management (AUM) per client, terminated their relationship within the initial 90-day period. This churn, although seemingly small, translated to a potential loss of $1.5 million in AUM quarterly, or $6 million annually. This figure, coupled with the costs associated with acquiring new clients (estimated at $5,000 per client), significantly impacted profitability and sustainable growth.

Analysis revealed that these early departures stemmed from several factors, including:

• Lack of Personalized Attention: Clients felt lost in the shuffle during the initial onboarding phase. They were overwhelmed with paperwork and lacked a clear understanding of the firm's processes and investment strategies.
• Unclear Expectations: Clients didn't fully understand the value proposition of Granite Peak and the specific benefits they would receive. The initial investment strategy wasn't clearly communicated, leading to anxiety and uncertainty.
• Inadequate Communication: Clients felt that communication was reactive rather than proactive. They were waiting for updates instead of receiving regular check-ins and personalized support.
• Difficulty Navigating the Platform: Navigating the client portal and understanding reporting tools proved challenging for some clients, especially those less tech-savvy, leading to frustration.
• Perceived Lack of Value: Clients weren't fully appreciating the value of the firm's services in the early stages, before they experienced the long-term benefits of the investment strategy.

These issues, compounded by the competitive landscape and the ease with which clients could switch advisors, underscored the urgent need for a revamped onboarding process focused on delivering an exceptional client experience from day one. The firm projected that if they could decrease churn by just 2%, they could increase overall AUM by $4 million annually, resulting in a significant revenue boost.

The Approach

Granite Peak Advisors recognized that addressing the early churn problem required a fundamental shift in their onboarding strategy. They moved away from a transactional, paperwork-heavy process towards a relationship-focused, personalized "white-glove" experience.

The core principles of the new onboarding program were:

1. Personalization: Tailoring the onboarding experience to each client's unique needs, goals, and communication preferences.
2. Proactive Communication: Establishing a consistent and transparent communication cadence to keep clients informed and engaged.
3. Education: Providing comprehensive educational resources to help clients understand the firm's investment philosophy and the value they receive.
4. Accessibility: Ensuring that clients have easy access to support and guidance whenever they need it.
5. Technology Integration: Leveraging technology to streamline the onboarding process and enhance the client experience.

The specific steps implemented in the white-glove onboarding program included:

• Personalized Video Introduction: Upon signing on as a client, each individual received a personalized video introduction from their dedicated financial advisor and onboarding specialist. This video welcomed them to the firm, highlighted their specific goals, and outlined the next steps in the onboarding process.
• Dedicated Onboarding Specialist: Every new client was assigned a dedicated onboarding specialist who served as their primary point of contact for any questions or concerns. This specialist guided them through the paperwork, answered their questions, and ensured a smooth transition.
• Welcome Package: A carefully curated welcome package was sent to each new client, including a handwritten note from their advisor, a detailed guide to the firm's services, and access to exclusive educational resources.
• Proactive Check-in Calls: Regular check-in calls were scheduled during the first 90 days to proactively address any questions or concerns. These calls provided an opportunity for clients to voice their anxieties, receive personalized advice, and build a strong relationship with their advisor. The cadence was weekly for the first month, bi-weekly for the second, and monthly for the third.
• Client Portal Training: Clients received personalized training on how to navigate the client portal, access reports, and monitor their investment performance. This training was tailored to their specific tech savviness and communication preferences.
• Investment Strategy Deep Dive: A dedicated meeting was scheduled to thoroughly review the client's investment strategy, explain the rationale behind the asset allocation, and answer any questions they had about the firm's investment philosophy. This ensured alignment and built confidence.

The firm also implemented a feedback mechanism to continuously improve the onboarding process. After 30 days, new clients received a survey to gauge their satisfaction and identify any areas for improvement. The results were reviewed regularly and used to refine the onboarding program.

Technical Implementation

The success of Granite Peak's white-glove onboarding program relied heavily on leveraging technology to streamline processes and enhance communication. The firm integrated several key tools:

• Salesforce: Salesforce served as the central hub for managing the onboarding process. Tasks were assigned to onboarding specialists, deadlines were tracked, and client communication was logged. Custom fields were created to capture client preferences and track progress through each stage of the onboarding journey. Salesforce automation rules triggered emails and reminders to ensure timely follow-up. The integration with other systems ensured data consistency and a 360-degree view of each client.
• Calendly: Calendly was used to schedule all onboarding calls, allowing clients to easily book appointments at their convenience. This eliminated the back-and-forth associated with scheduling and ensured that calls were efficiently managed.
• Loom: Loom was used to create personalized video introductions for each new client. These videos provided a warm welcome and helped to establish a personal connection from the outset. The short, informative videos were highly engaging and allowed clients to learn about their advisor and onboarding specialist in a convenient format. The cost per video was negligible compared to the potential client lifetime value.
• Email Marketing Automation: The firm used email marketing automation to deliver personalized onboarding emails, providing clients with valuable information and resources at each stage of the process. The emails were segmented based on client demographics and investment goals, ensuring that the content was relevant and engaging. Open rates and click-through rates were closely monitored to optimize the email campaigns.
• Client Portal: The existing client portal was redesigned to provide a more intuitive and user-friendly experience. New features were added to make it easier for clients to access reports, monitor their portfolio performance, and communicate with their advisor. A detailed FAQ section was added to address common client questions.

The integration of these tools, along with a well-defined workflow, allowed Granite Peak to deliver a consistent and personalized onboarding experience at scale.

The ROI calculation for the program was based on the following methodology:

• AUM Retained: Calculated as the AUM of clients who would have churned without the new program, now retained.
• Lost Revenue Avoided: Calculated as the revenue Granite Peak would have lost due to the churning clients (assuming an average advisory fee of 1% of AUM).
• Acquisition Cost Avoided: Calculated as the cost of acquiring new clients to replace the churned ones (estimated at $5,000 per client).
• Program Costs: Calculated as the cost of the onboarding specialist's salary, the cost of the welcome package, and the cost of the technology tools.

Results & ROI

The implementation of the white-glove onboarding program yielded remarkable results for Granite Peak Advisors. The most significant outcome was a dramatic increase in client retention, with the 90-day churn rate plummeting from 3% to just 0.2%. This translates to a 98% client retention rate, virtually eliminating the initial churn that previously plagued the firm.

Here's a detailed breakdown of the results:

• Client Retention: Increased from 97% to 98% within the first 90 days.
• AUM Retention: Retained an additional $14.6 million in AUM annually that would have otherwise been lost due to churn (calculated as 2.8% reduction in churn multiplied by $520 million AUM).
• Reduced Acquisition Costs: Saved $50,000 annually in client acquisition costs by retaining clients instead of needing to replace them. (Assuming 10 new clients saved from churning, and acquisition cost of $5,000 per client)
• Increased Client Satisfaction: Client satisfaction scores, measured through post-onboarding surveys, increased by 25%, indicating a significant improvement in the client experience.
• Improved Advisor Efficiency: The streamlined onboarding process freed up advisors' time, allowing them to focus on providing more strategic advice and building stronger client relationships. Advisors reported spending approximately 15% less time on administrative tasks related to onboarding.
• Increased Referrals: The improved client experience led to a noticeable increase in client referrals, contributing to organic growth. Client referrals increased by 10% within the first year of implementing the program.

ROI Calculation:

• Lost Revenue Avoided: $146,000 (1% of $14.6 million AUM)
• Acquisition Cost Avoided: $50,000
• Total Benefits: $196,000
• Program Costs: $80,000 (Onboarding specialist salary, software licenses, welcome package materials)
• Net ROI: $116,000
• ROI Percentage: 145% (($116,000 / $80,000) * 100%)

These results demonstrate the significant impact that a well-designed and executed onboarding program can have on client retention and overall business performance. The investment in personalized communication, proactive support, and technology integration proved to be highly worthwhile.

Key Takeaways

The success of Granite Peak Advisors' white-glove onboarding program offers several key takeaways for other RIAs and wealth management firms:

1. Prioritize the Client Experience: Focus on creating a positive and personalized onboarding experience that makes clients feel valued and supported.
2. Invest in Proactive Communication: Establish a consistent communication cadence to keep clients informed and engaged. Don't wait for clients to reach out with questions; proactively address their concerns.
3. Leverage Technology to Streamline Processes: Utilize technology tools to automate tasks, improve efficiency, and enhance the client experience.
4. Measure and Optimize: Track key metrics, such as client retention and satisfaction scores, to measure the effectiveness of your onboarding program and identify areas for improvement.
5. Empower Your Team: Provide your advisors and onboarding specialists with the training and resources they need to deliver an exceptional client experience. A dedicated onboarding specialist can make a significant difference.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors identify at-risk clients and proactively address their concerns, leading to improved retention and increased AUM. Visit our tools to see how we can help your practice.