Simplified Onboarding: 40% Faster Account Setup
Executive Summary
In today's competitive wealth management landscape, first impressions matter. Facing a client onboarding process plagued by cumbersome paperwork and extended timelines, one RIA firm partnered with Golden Door Asset to streamline its procedures. By implementing a fully digital onboarding system leveraging e-signatures, automated data collection, and compliance automation, the firm achieved a 40% reduction in account setup time, significantly enhancing client satisfaction and minimizing drop-off rates during the critical onboarding phase.
The Challenge
For many Registered Investment Advisors (RIAs), the initial client onboarding process can be a significant source of friction. Before implementing a digital solution, our client, a growing RIA managing over $500 million in assets, faced numerous challenges that negatively impacted both their operational efficiency and client experience.
The primary issue was the sheer volume of paperwork involved. New clients were required to complete an average of 25 pages of documents, ranging from risk tolerance questionnaires to account agreements and regulatory disclosures. This process was not only time-consuming for clients but also for the firm's support staff, who spent countless hours manually reviewing and processing these documents. Each onboarding package took an average of 5 hours of staff time, costing the firm approximately $250 per client in labor costs alone.
The manual nature of the process also introduced a higher risk of errors and delays. Data entry mistakes were common, leading to inaccuracies in client records and potential compliance issues. Moreover, the reliance on traditional mail and fax machines meant that it often took several weeks to complete the onboarding process, a timeline increasingly unacceptable to digitally savvy clients accustomed to instant gratification.
This lengthy onboarding time had a direct impact on the firm's ability to acquire and retain clients. Potential clients, frustrated by the cumbersome paperwork and slow pace, would often delay opening accounts or, worse, abandon the process altogether. The firm estimated that they were losing approximately 5% of potential clients during the onboarding phase, translating to a potential loss of $25 million in assets under management (AUM) annually.
Consider the example of a prospective client, Dr. Emily Carter, a busy surgeon looking to invest $2 million. Dr. Carter initially expressed enthusiasm about working with the firm but became increasingly frustrated with the endless paperwork and the need to print, sign, and scan documents. After two weeks of back-and-forth, she nearly withdrew her application, citing the cumbersome process as a major deterrent. Stories like Dr. Carter's highlighted the urgent need for a more efficient and client-friendly onboarding experience.
Compliance was another significant concern. The firm struggled to maintain accurate and up-to-date records of client information, making it difficult to comply with regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. The manual process also made it challenging to track the status of onboarding tasks and ensure that all necessary steps were completed in a timely manner. The fear of regulatory penalties due to incomplete or inaccurate records loomed large.
The Approach
Golden Door Asset worked closely with the RIA to develop a comprehensive digital onboarding solution designed to address these challenges and improve the overall client experience. The strategy focused on three key pillars: digitization, automation, and compliance.
Digitization: The first step was to convert all paper-based forms into digital formats. This involved creating online versions of all necessary documents, including account applications, risk tolerance questionnaires, and client agreements. These forms were designed to be user-friendly and accessible on any device, allowing clients to complete them at their convenience.
Automation: To streamline the onboarding process, Golden Door Asset implemented a range of automation tools. E-signature technology was integrated to eliminate the need for printing, signing, and scanning documents. Automated data collection tools were used to extract information from client documents and populate the firm's CRM system, reducing the risk of errors and saving time for support staff. Workflow automation was implemented to trigger tasks and notifications based on specific events, ensuring that all necessary steps were completed in a timely manner.
Compliance: Ensuring compliance with regulatory requirements was a top priority. Golden Door Asset integrated with SmartRIA, a leading compliance platform, to automate KYC and AML checks. This integration enabled the firm to verify client identities, screen for sanctions and politically exposed persons (PEPs), and monitor transactions for suspicious activity. The platform also provided audit trails and reporting capabilities, making it easier to demonstrate compliance to regulators.
The decision-making framework involved a thorough analysis of the firm's existing onboarding process, identifying pain points and opportunities for improvement. This was followed by a detailed evaluation of available technology solutions, considering factors such as functionality, cost, and integration capabilities. The final solution was designed to be scalable and adaptable to the firm's evolving needs.
For example, to address Dr. Carter's situation directly, the digital onboarding system was designed to be completed within a single online session. The system pre-populated information based on initial contact forms, minimizing the amount of data Dr. Carter needed to manually enter. Real-time progress tracking allowed Dr. Carter to see exactly what steps were required and how long each step would take. This transparency significantly improved her perception of the process and ultimately convinced her to proceed with opening an account.
Technical Implementation
The technical implementation involved a combination of custom development and integration with third-party tools. The core of the solution was a web-based client portal built using React for the front-end and Node.js for the back-end. This portal served as the central hub for all onboarding activities.
E-signatures: DocuSign was integrated to enable clients to electronically sign documents. The DocuSign API was used to embed signing ceremonies directly within the client portal, providing a seamless user experience. Each document was tagged with specific signature fields, ensuring that all required signatures were captured. The use of DocuSign also provided a secure and auditable record of all signed documents.
Data Collection: Web forms were designed using a combination of HTML, CSS, and JavaScript. These forms were directly integrated with the firm's CRM system using APIs. As clients completed the forms, the data was automatically populated into the CRM, eliminating the need for manual data entry. Data validation rules were implemented to ensure the accuracy and completeness of the data. Specifically, the system utilized regular expressions to validate phone numbers, email addresses, and other critical data points. Error messages were displayed in real-time, guiding clients to correct any mistakes.
Compliance Automation: The integration with SmartRIA involved setting up automated workflows for KYC and AML checks. When a new client initiated the onboarding process, the system automatically sent their information to SmartRIA for verification. SmartRIA then performed background checks, screened for sanctions and PEPs, and generated a risk score. The results were automatically displayed in the client portal, allowing the firm to quickly identify any potential compliance issues. In cases where further investigation was required, SmartRIA provided tools to manage the investigation process and document the findings.
Calculations: The 40% reduction in account setup time was calculated by comparing the average time it took to onboard a new client before and after implementing the digital onboarding solution. The average onboarding time before implementation was 12 days. After implementation, the average onboarding time was reduced to 7.2 days. The calculation was as follows:
((12 days - 7.2 days) / 12 days) * 100% = 40%
This calculation demonstrates the significant time savings achieved through the digital onboarding solution.
Results & ROI
The implementation of the digital onboarding solution yielded significant results, positively impacting both the client experience and the firm's bottom line.
- Account Setup Time Reduction: The most significant achievement was the 40% reduction in account setup time, from an average of 12 days to 7.2 days. This faster turnaround time significantly improved client satisfaction and reduced the likelihood of clients abandoning the onboarding process.
- Client Satisfaction Improvement: Client satisfaction scores, measured through post-onboarding surveys, increased by 25%. Clients consistently praised the ease of use and convenience of the digital onboarding system. The Net Promoter Score (NPS) increased from 30 to 55.
- Reduced Drop-Off Rate: The client drop-off rate during the onboarding phase decreased from 5% to 2%, resulting in a significant increase in client acquisition. This translated to an estimated $15 million increase in AUM annually.
- Increased Staff Efficiency: The automation of data collection and other tasks freed up staff time, allowing them to focus on more strategic activities. The firm estimated that they saved approximately 3 hours of staff time per client, resulting in a cost savings of $150 per client.
- Improved Compliance: The integration with SmartRIA streamlined compliance processes and reduced the risk of regulatory penalties. The firm was able to demonstrate compliance with KYC and AML requirements more effectively.
- Tangible Financial Impact: The firm saved $12,500 annually in labor savings and saw a $15M increase in AUM due to reduced client churn. These results show the long-term ROI from the initial investment.
Key Takeaways
Here are several actionable insights for other RIAs considering similar initiatives:
- Prioritize the Client Experience: Focus on creating a seamless and user-friendly onboarding experience. Eliminate unnecessary steps and make it easy for clients to provide the required information.
- Embrace Automation: Leverage technology to automate repetitive tasks, such as data collection, document processing, and compliance checks. This will free up staff time and reduce the risk of errors.
- Invest in Compliance: Implement a robust compliance program that is integrated with your onboarding process. This will help you meet regulatory requirements and protect your firm from potential penalties.
- Track Key Metrics: Monitor key metrics, such as account setup time, client satisfaction scores, and drop-off rates, to measure the effectiveness of your onboarding process. Use this data to identify areas for improvement.
- Security First: All onboarding portals and data collection processes must emphasize the security of client data. Use encryption, two-factor authentication, and regular security audits to protect client information.
About Golden Door Asset
Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate tasks, personalize client experiences, and improve decision-making with data-driven insights. Visit our tools to see how we can help your practice.