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The Onboarding Opportunity Is Still Being Missed: New Research

Wendy Spires

23 October 2019

Today sees the launch of a new report tracing the industry’s progress in streamlining the onboarding process over the past five years, finding – to say the least – that a lot is still lacking. Despite the sector’s longstanding recognition that poor onboarding experiences hurt profitability in myriad ways, all too often their technology set-ups are holding them back.

WealthBriefing first thrust this multi-faceted area of wealth management operations into the limelight back in 2014 with a hugely popular research report and global thought-leadership programme. Revisiting the topic five years on reveals that for all too many firms there is still a great deal of work to be done.

A weak point for too many good wealth managers
We surveyed 82 wealth managers around the world to assess how long onboarding is taking, how well data is flowing through organisations and what measures have been taken to wring maximum value out of the process for both clients and institutions. Our global survey shows that for great swathes of the industry the answers to those questions are “too long”, “poorly” and “not nearly enough”.

Our research found that over a quarter of firms are likely to be seriously disappointing on duration by taking over a month to onboard a standard HNWI – with the result that over half of organisations worry that would-be clients will drop out before completing the process. 

Meanwhile, the vast majority have yet to expedite the process and empower clients with portals where they can securely upload information and documentation. Even seemingly modest ambitions for e-signatures are not being fully realised, it would appear. 

Clearly, onboarding remains a source of frustration for clients, relationship managers and compliance staff – not to mention business leaders who will be seeing an operational burden where a value-add activity should be. And, while much of the blame can certainly be laid at the feet of increased compliance and data collection requirements, it also seems undeniably the case that sorely-needed technology upgrades remain on the to-do list for a great many firms.

STP and systems integration sorely lacking
Our study highlights quite shockingly low levels of straight-through processing and systems integration across the industry – with all the inefficiency, risks and lost opportunities that implies. 

As our expert commentators point out, the initial stages of relationships represent a “golden period” where clients are highly engaged and receptive to doing more business. Unfortunately for many relationship managers, the onboarding phase is often a rather sub-optimal start to that.

Of course, RMs are very often the heroes of this piece, cultivating the goodwill of clients to get them through this frequently tricky period and getting them “over the line”, come what may. Yet, having them and investors tied up in knots for weeks on end is very far from ideal.

It must also be said that the picture isn’t wholly negative, however. According to our study, around a tenth of firms are where they would want to be: these are centralising the data they gather at onboarding for re-use throughout the organisation while also maximising their use of digital channels to make collaboration internally - and with clients - a smooth affair. 

Making rapid improvements are high on the agenda for much of the remainder – as well they should be at a time when retail bank accounts can be opened with a selfie on a smartphone. Getting a wealth management relationship off the ground is doubtlessly a more complex, drawn-out affair, but shielding would-be clients from any internal strife organisations might endure has to be top priority as seamless service expectations continue to rise.

Onboarding should be a pain-free process in the year 2019; firms with the right technology are even making it a pleasant one. That is the opportunity to differentiate which so many firms have yet to capitalise on.

To see how your firm compares and learn about the latest innovations in client take-on, download your free copy of Connecting the Client Journey: Why Onboarding Remains an Untapped Opportunity for Wealth Managers.