Precision Financial Achieves 40% Faster Onboarding with Automation

Precision Financial Achieves 40% Faster Onboarding with Automation

Executive Summary

Precision Financial Group, a growing RIA firm, struggled with a manual client onboarding process that took up to three weeks, impacting advisor productivity and revenue potential. By implementing a fully integrated onboarding platform with automated KYC/AML checks, document management, and account setup, Precision Financial reduced onboarding time by 40%. This efficiency gain freed up advisors to focus on client acquisition and portfolio management, resulting in an additional $200,000 in revenue within the first year.

The Challenge

Precision Financial Group, managing over $500 million in assets, was experiencing significant growing pains. Their client onboarding process, heavily reliant on manual data entry and paper-based documentation, was a major bottleneck. The process typically took between two to three weeks to complete, consuming valuable time from their team of eight advisors.

Each new client required advisors to manually enter the same information across multiple systems, including their CRM, document management system, and custodial platforms. This redundant data entry was not only time-consuming but also prone to errors, leading to further delays and potential compliance issues. A typical onboarding file contained over 50 pages of documents, including KYC/AML questionnaires, account applications, risk tolerance assessments, and fee disclosures, all requiring manual review and signature verification.

The firm's reliance on a fragmented technology stack exacerbated the problem. Data silos between their Wealthbox CRM, Laserfiche document management system, and various custodial platforms made it difficult to track the progress of each client's onboarding. This lack of visibility hindered communication and coordination between advisors, operations staff, and compliance officers.

Specifically, the manual KYC/AML screening process, which involved manually searching multiple databases for potential red flags, added an average of 3 days to the onboarding timeline. This was especially problematic given the increasing regulatory scrutiny and the need to comply with stringent KYC/AML regulations.

The lengthy onboarding process also negatively impacted the client experience. New clients were often frustrated by the amount of paperwork and the delays in getting their accounts funded and managed. This could lead to a negative first impression and potentially impact client retention. Prior to the automation, Precision Financial estimated they were losing approximately 5 prospective clients per year due to the slow onboarding process, representing roughly $2.5 million in AUM. Furthermore, advisors spent an average of 15 hours per new client on onboarding-related tasks, significantly limiting their ability to focus on business development and client relationship management.

The Approach

Lisa Tanaka, the Chief Operating Officer at Precision Financial Group, recognized the urgent need to streamline the client onboarding process. She spearheaded a project to implement a fully integrated onboarding platform that would automate key tasks and improve efficiency.

Her approach began with a thorough assessment of the existing onboarding process, identifying pain points and opportunities for improvement. This involved interviewing advisors, operations staff, and compliance officers to understand their individual needs and challenges. Lisa then researched various onboarding solutions, evaluating their features, functionality, and integration capabilities.

After careful consideration, Lisa selected a solution that integrated seamlessly with their existing Wealthbox CRM and Laserfiche document management system. The platform also included a robust KYC/AML module that automated the screening process, reducing the time required to perform these checks.

The core strategy centered on automating three key areas:

1. Automated Data Capture: The new system allowed advisors to capture client information through online forms that automatically populated the CRM and document management system, eliminating redundant data entry.

2. Workflow Automation: The platform automated the various steps in the onboarding process, such as sending out document requests, scheduling appointments, and triggering compliance reviews. This ensured that each client's onboarding progressed smoothly and efficiently.

3. Integrated KYC/AML: The KYC/AML module integrated with a third-party database, allowing for automated screening and risk assessment. This significantly reduced the time required to perform these checks and ensured compliance with regulatory requirements.

Lisa also prioritized creating a user-friendly experience for both advisors and clients. The online forms were designed to be intuitive and easy to complete, and the platform provided clear instructions and guidance throughout the onboarding process. She also created a series of training videos and guides to help advisors and staff learn how to use the new system effectively.

Finally, the strategy included a phased rollout of the new platform, starting with a pilot group of advisors. This allowed Lisa to gather feedback and make adjustments before rolling out the system to the entire firm.

Technical Implementation

The technical implementation involved integrating Wealthbox CRM, Laserfiche document management, and a third-party KYC/AML API using a combination of vendor-provided integrations and custom Python scripts.

• Wealthbox CRM Integration: The core of the onboarding system revolved around Wealthbox CRM, which served as the central repository for client information. The selected onboarding platform provided a native integration with Wealthbox, allowing for seamless data transfer between the two systems. Custom fields were created within Wealthbox to track the progress of each client's onboarding.

• Laserfiche Document Management: Laserfiche was used to securely store and manage all client-related documents. The onboarding platform automatically generated folders within Laserfiche for each new client and uploaded documents as they were received. A custom workflow was created within Laserfiche to route documents to the appropriate personnel for review and approval.

• KYC/AML Integration: A third-party KYC/AML API was integrated with the onboarding platform to automate the screening process. The API allowed the platform to automatically search multiple databases for potential red flags, such as sanctions lists and politically exposed persons (PEPs). This reduced the time required to perform these checks from 3 days to less than an hour. The chosen API provider offered a robust risk scoring system, allowing Precision Financial to prioritize high-risk clients for further review.

• Python Scripting: Custom Python scripts were written to automate data transfer between systems that lacked native integrations. For example, a script was created to automatically populate account applications with data from Wealthbox and Laserfiche. These scripts used APIs provided by each vendor to access and manipulate data. Another Python script was used to generate automated fee disclosure documents based on client-specific information, ensuring compliance and accuracy. These scripts were scheduled to run automatically on a daily basis, ensuring that data was always up-to-date.

• Security Considerations: Security was a top priority throughout the implementation process. All data was encrypted both in transit and at rest, and access to sensitive information was restricted to authorized personnel. Regular security audits were conducted to ensure compliance with industry best practices and regulatory requirements.

• Calculation Methods: The ROI was calculated based on the time saved by advisors and operations staff, multiplied by their hourly rates. The additional revenue generated was calculated based on the increase in new clients acquired and the average revenue per client. Specifically, the savings were calculated as: (Pre-automation Onboarding Time - Post-Automation Onboarding Time) * Advisor/Staff Hourly Rate * Number of New Clients. The additional revenue was calculated as: (Post-Automation New Clients - Pre-Automation New Clients) * Average Revenue Per Client. Average revenue per client was calculated based on the average AUM per client and the firm's fee structure (1% AUM per year).

Results & ROI

The implementation of the automated onboarding platform yielded significant results for Precision Financial Group, significantly boosting efficiency and revenue.

• Onboarding Time Reduction: Onboarding time decreased by 40%, from an average of 2-3 weeks to just 7-10 days. This freed up advisors and operations staff to focus on more strategic tasks.
• Increased Advisor Capacity: Advisors gained back an average of 6 hours per client, allowing them to onboard an additional 2-3 clients per month collectively.
• Revenue Growth: The increased efficiency resulted in the acquisition of 4 additional clients within the first year (avoiding previous losses and growing slightly above initial estimates). This generated an estimated $200,000 in additional revenue based on an average initial investment of $500,000 per client and a management fee of 1% of AUM.
• Reduced Operational Costs: The automation reduced the need for manual data entry and document processing, resulting in a 15% reduction in operational costs related to onboarding. This equated to approximately $10,000 in savings per year.
• Improved Client Satisfaction: Client satisfaction scores related to the onboarding process increased by 25%, indicating a better overall client experience. This was attributed to the faster onboarding time and the streamlined communication process.
• Compliance Enhancement: Automated KYC/AML checks significantly reduced the risk of non-compliance and improved the accuracy of client data.

In summary, the investment of $25,000 in the onboarding automation platform yielded a return on investment of over 800% in the first year alone.

Key Takeaways

1. Automate Redundant Tasks: Identify and automate repetitive tasks like data entry and document processing to free up valuable time for advisors and operations staff.
2. Integrate Your Technology Stack: Ensure that your CRM, document management system, and other key systems are tightly integrated to facilitate seamless data flow and workflow automation.
3. Prioritize Client Experience: Design your onboarding process with the client in mind, making it easy and convenient for them to provide the information you need.
4. Invest in KYC/AML Automation: Automate your KYC/AML screening process to improve compliance and reduce the risk of financial crime.
5. Measure and Track Your Results: Continuously monitor the performance of your onboarding process and make adjustments as needed to optimize efficiency and client satisfaction.

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