Close Close

Practice Management > Building Your Business

Digital Client Onboarding: A Key Step Toward Wealth Management Platform Growth

Your article was successfully shared with the contacts you provided.

The initial interaction between a financial advisor and client is crucial not only for building the trust and confidence needed to sustain that relationship, but also for the long-term health of the wealth management firm.

According to a new report from Aite Group, “In an increasingly competitive environment, wealth management firms realize they do not have a second chance to make a first impression.”

With that in mind, many wealth management firms have automated their client onboarding processes, providing an easy, fast, visible and interactive process that many clients are demanding today, according to the report, “Client Onboarding in Wealth Management: Market Overview.”

This digitized process, in turn, helps to support a firm’s compliance regime, keep costs under control, and optimize operations—all allowing the firm be more competitive in an increasingly digital and complicated market.

Almost 40% of the 400 financial advisors surveyed for the report said they can open accounts completely electronically, including e-signature. About one-third still require some paper in the process, indicating there is still room for more automation in the onboarding process.

About 60% of advisors reported they can open a new client account in one hour or less; a similar percentage reported that advisors, not support staff or the clients themselves, opened accounts.

But while “most advisors” use some type of automated process to open accounts “few can boast true straight-through processing across all delivery channels and account types,” Aite found.

One reason for that: “legacy technologies” that are likely slow, inefficient and possibly not sufficiently cyber-secure to support a broader, more digital, client-centric approach, according to Aite.

An updated reinvigorated onboarding process can instead reach into core systems of firms, their data infrastructure, compliance processes and CRM, delivering a platform for business growth.

“Most firms know they need to upgrade and feel it’s necessary to invest heavily in technology” to develop a “strategic solution” that can “future-proof their business in the face of a changing market,” the report noted.

The vendors that provide that technology, in turn, need to communicate to wealth management firms what they can provide and how those their technology can support a broader business strategy.

— Related on ThinkAdvisor:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.