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Customer Onboarding

Digitalising Wealth Management Onboarding: Are You Asking the Right Questions?

Back office systems, CRM systems and wrap platforms have been in place in firms for many years, and there are a number of quality partners in the market from which to choose. All of them do a good job of giving firms the ability to perform attitude-to-risk assessments, track asset transfers, and streamline portfolio management, as well as provide integrated workflow and client targeting capabilities, Straight Through Processing (STP) of multi-asset transactions, cash handling, asset custody, performance management and more. In addition, investors are able to access their portfolios online and get up-to-date visibility of the value of their investments.

What more could advisers and wealth management firms want than that?

Well, quite a lot if they ask the right questions, such as: How will digital technology enable us to win more business, onboard clients faster and automate manual back–office processes, which account for a significant amount of lost revenue?

What more could investors want?

Again, quite a lot if they ask the right questions, such as: How can I enjoy a seamless, paperless, efficient and fast process from the moment I have the first interaction with an adviser?

Once investors make a decision to seek help with their investments, time is of the essence.

In summary? Investors and advisers are on the same page when it comes to wants and needs. They want to arrive at a solution and a service provision faster. Therefore, although the reasons are different, the outcome is the same.

However, in my previous article, a number of issues were highlighted that constrict wealth management and investment advisers in their quest to drive inefficiencies from their process, enhance the customer experience, reduce drop-out rates and win new business. Therefore, the status quo largely remains. The costs of these impediments are enormous. Consider the following:

  • It takes an average of 41 days to onboard a high-net worth client. This amounts to more than 2,000 weeks of missed fees/charges per year, or to put that into a different context, 41 years’ worth of lost charges per year, every
  • Investors (especially millennials, to whom the world’s wealth is moving) expect their client experience to be as good as they would receive from popular online service vendors. The process has to deliver a digital, omnichannel experience that enables them to open an account with an adviser in a simple way, with as few meetings and paperwork as possible. Otherwise, clients are likely to withdraw from the process.
  • Robo-advice is growing, and firms are becoming increasingly disintermediated.
  • In an Aite Group survey of wealth and adviser firms, 38% of digitally enabled firms reported revenue growth of 10% or greater over their non-digital counterparts.

Given this environment, the next question should be:

What technology and capabilities will the most successful firms employ to differentiate their services from competitors?

  • The firm will be able to digitalise the data on any document (such as a utility bill, a payslip, a driver licence, a passport, or any other required form) and seamlessly input the data into their downstream systems with no re-keying required. This results in fewer mistakes.
  • Digital mobile technology will be employed to securely capture all the key information in the first meeting. Specifically, the camera on the customer’s mobile device should function as an intelligent scanner that can automatically extract, verify, classify and digitally transform data. The information is input straight into any back-office systems or platforms, and no manual intervention is required. For security, the technology must ensure that the picture is never saved in the mobile device camera roll, but deleted instantaneously.
  • AML/KYC processes will be automated in real time. All necessary checks will be performed in seconds, rather than days, by using the digitally extracted data to drive robotic process automation to access all checkpoints. Instant compliance checks (with no manual intervention or keying of data into various systems, websites or third-party portals) will return results instantly or – most importantly – give recommendations to the adviser that further information is needed.
  • The firm will produce a tailored agreement that prospective clients can digitally sign. E-signatures are an area of increasing interest for firms, but the capability must be built into the overall experience and service platform. On its own, it isn’t worth much. It has to be embedded in the process so that during the meeting, investors can e-sign to confirm they are happy to progress/pay fees/transfer assets once the portfolio is created and verified. The e-signature technology must also be biometrically enabled and provide an auditable chain of communication that proves the investor intended to sign the document so as to satisfy the interests of the UK courts.
  • Successful firms will use technology to empower their most highly skilled people to do the work they are best at – whether that is using those skills to win clients, ensure compliance and/or provide a superior client experience.

Many firms, such as CRM providers, wrap services providers, etc., claim to be able to provide these capabilities. They can’t.

We provide digital technology to financial services firms for over 30 years, and our client base incorporates 75% of the top 500 financial institutions in the world, which manage or provide custody for over $80trn of assets. The technology is used within firms’ investment banking, broker-dealer, retail, wealth management and private banking businesses to ensure that they DO NOT have to run at the speed of paper.

One of the best things about the digital world is that where previously digital onboarding technology was only available to global financial institutions, today a level playing field has been created. Through digitalisation, all can now reap the benefits. Wealth managers and investment advisers, however, have the most to gain.