Digital Document Collection Cuts Onboarding Time by 50%

Digital Document Collection Cuts Onboarding Time by 50%

Executive Summary

Ferguson Estate Planning, a leading RIA managing over $350 million in assets, faced a significant bottleneck in its client onboarding process due to reliance on manual document collection and processing. By implementing a secure online portal leveraging DocuSign for electronic signatures and integrating it with their CRM, Ferguson Estate Planning eliminated paper-based processes and streamlined document review. This resulted in a 50% reduction in onboarding time, saving an average of 4 hours per client, and boosting client satisfaction scores by 20%.

The Challenge

Ferguson Estate Planning prided itself on delivering personalized financial plans tailored to each client's unique needs. However, the initial onboarding phase presented a growing challenge. The traditional paper-based process was time-consuming, inefficient, and prone to errors.

Specifically, the firm faced the following problems:

• Lengthy Onboarding Times: Collecting necessary documents, such as account statements, beneficiary designations, and risk tolerance questionnaires, required multiple phone calls, emails, and mailings. This often took upwards of 8 hours per client, stretching the onboarding process to 2-3 weeks. This delay frustrated new clients eager to begin their financial planning journey and tied up valuable advisor time that could be spent on revenue-generating activities.

• High Error Rates: Manually entering data from physical documents into the CRM system led to frequent errors, requiring time-consuming corrections and potentially impacting the accuracy of financial plans. A conservative estimate placed the error rate at 5%, translating to approximately 1 out of every 20 client files requiring manual correction. Given that each correction took approximately 30 minutes to resolve, this consumed significant administrative resources.

• Compliance Risks: Managing physical documents created compliance challenges related to data security and storage. Ensuring that sensitive client information was properly secured and compliant with regulations like SEC Regulation S-P, which mandates safeguards for customer financial information, was a constant concern. Maintaining secure physical storage and managing document disposal added considerable administrative overhead.

• Client Frustration: The cumbersome process often resulted in client frustration. Clients disliked the need to print, sign, and mail documents, particularly those accustomed to digital solutions in other areas of their lives. This negative initial experience could detract from the overall client relationship and impact client retention.

• Opportunity Cost: The time spent on manual onboarding processes diverted resources from higher-value activities. For example, the lead advisor, with a billable rate of $350 per hour, spent approximately 2 hours per week chasing down missing documents, representing a direct cost of $700 per week, or $36,400 per year.

These challenges highlighted the urgent need for a more efficient and streamlined onboarding process that would enhance client experience, improve operational efficiency, and reduce compliance risks.

The Approach

Ferguson Estate Planning recognized that a digital transformation of its onboarding process was essential to address the aforementioned challenges. Their approach involved a strategic shift from paper-based processes to a fully digital workflow, leveraging technology to automate document collection, verification, and storage.

The following key steps were undertaken:

1. Needs Assessment: Conducted a thorough analysis of the existing onboarding process to identify pain points, bottlenecks, and opportunities for improvement. This involved interviewing advisors, administrative staff, and clients to gather feedback and insights.

2. Technology Selection: Researched and evaluated various technology solutions for electronic signatures and document management. DocuSign was ultimately chosen for its robust security features, ease of use, and seamless integration capabilities.

3. Workflow Design: Designed a new digital onboarding workflow that eliminated paper documents and streamlined the review process. This involved creating digital versions of all required documents and establishing clear guidelines for clients to upload and electronically sign them.

4. CRM Integration: Developed a custom integration between DocuSign and the firm's CRM system (Salesforce) to automatically track document status, trigger notifications, and update client records. This ensured that all information was centrally located and easily accessible.

5. Security & Compliance: Implemented robust security measures to protect client data, including encryption, access controls, and regular security audits. Ensured compliance with all relevant regulations, including SEC Regulation S-P and GDPR (for clients residing in the European Union).

6. Training & Support: Provided comprehensive training to advisors and administrative staff on the new digital onboarding process and the use of DocuSign and the CRM integration. Offered ongoing support to ensure a smooth transition and address any questions or issues that arose.

7. Phased Rollout: Implemented the new digital onboarding process in a phased approach, starting with a pilot group of clients. This allowed the firm to identify and address any issues before rolling it out to all clients.

Ferguson Estate Planning specifically prioritized the user experience (UX) of the digital onboarding portal. Recognizing that user adoption was crucial for success, the portal was designed with an intuitive interface, clear instructions, and mobile responsiveness. This ensured that clients could easily navigate the system and complete the required steps, regardless of their technical proficiency or device.

Technical Implementation

The technical implementation involved several key components:

• DocuSign Integration: DocuSign was integrated with the CRM (Salesforce) using the DocuSign API. This allowed for the automatic generation and sending of documents to clients directly from within the CRM. The integration also enabled real-time tracking of document status, such as "sent," "viewed," and "signed."

• Custom Workflow Development: A custom workflow was developed within the CRM to manage the onboarding process. This workflow included automated tasks and notifications to ensure that all steps were completed in a timely manner. For example, when a client signed a document, an automated notification was sent to the advisor to review the document.

• Secure Document Storage: Signed documents were automatically stored in a secure cloud-based document management system (Box) that was integrated with the CRM. This ensured that all documents were readily accessible and protected from unauthorized access. Access permissions were configured to ensure that only authorized personnel could access sensitive client information. The documents were stored according to SEC record retention guidelines (typically six years for client-related documents).

• Data Encryption: All data transmitted between systems was encrypted using industry-standard encryption protocols (TLS 1.2 or higher). Data at rest was encrypted using AES-256 encryption.

• User Authentication: Multi-factor authentication (MFA) was implemented for all users to enhance security.

• Risk Tolerance Questionnaire Integration: The risk tolerance questionnaire was digitized using a secure online form builder (Typeform). The results were automatically integrated into the client's profile in the CRM, providing advisors with valuable insights into the client's risk appetite. The risk score was calculated using a proprietary algorithm that weighted different factors, such as investment experience, time horizon, and financial goals.

• Account Aggregation Integration: Plaid was integrated into the portal to allow clients to securely connect their existing financial accounts. This provided advisors with a comprehensive view of the client's financial situation and simplified the process of gathering account information.

• Compliance Monitoring: A compliance dashboard was created within the CRM to monitor the onboarding process and identify any potential compliance issues. This dashboard tracked key metrics, such as the time it took to complete each step of the onboarding process and the percentage of documents that were signed within a specified timeframe.

Results & ROI

The implementation of the digital document collection process yielded significant improvements across various key performance indicators (KPIs):

• Onboarding Time Reduction: The average onboarding time decreased from 8 hours per client to 4 hours per client, representing a 50% reduction. This freed up valuable advisor time to focus on client relationship management and business development.

• Client Satisfaction Improvement: Client satisfaction scores, as measured by post-onboarding surveys, increased by 20%. Clients appreciated the convenience and efficiency of the digital onboarding process.

• Error Rate Reduction: The error rate associated with manual data entry decreased from 5% to less than 1%, significantly improving data accuracy and reducing the need for corrections.

• Cost Savings: The reduction in onboarding time and error rates resulted in significant cost savings. The firm estimated that it saved approximately $15,000 per year in administrative costs. This calculation considers the time saved by administrative assistants (averaging $25/hr burdened cost) multiplied by the reduction in the error correction rate.

• Increased Capacity: The streamlined onboarding process allowed the firm to onboard more clients without increasing staff. This increased capacity enabled the firm to grow its assets under management (AUM) by 10% within the first year of implementation.

• Compliance Enhancement: The digital document management system improved compliance with regulatory requirements, such as SEC Regulation S-P. The system provided a secure and auditable trail of all client documents, making it easier to demonstrate compliance to regulators.

• Reduced Paper Consumption: The elimination of paper documents significantly reduced the firm's environmental footprint and decreased storage costs.

Specifically, the average new client investment was $500,000. With a 10% increase in clients onboarded, and assuming 20 new clients per year, that resulted in an additional $10 million in assets under management (AUM). At an average advisory fee of 1%, that translated to an additional $100,000 in annual revenue.

Key Takeaways

1. Embrace Digital Transformation: Financial advisory firms should embrace digital transformation to streamline their onboarding processes and improve efficiency.
2. Prioritize Client Experience: A seamless and user-friendly digital onboarding experience can significantly enhance client satisfaction and strengthen client relationships.
3. Invest in Integration: Integrating digital tools with existing CRM systems is crucial for creating a cohesive and efficient workflow.
4. Focus on Security and Compliance: Data security and compliance should be top priorities when implementing digital solutions. Ensure that all systems and processes are compliant with relevant regulations.
5. Measure and Track Results: Regularly measure and track the results of digital transformation initiatives to identify areas for improvement and demonstrate the value of the investment.

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