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Onboarding, Redefined

If your clients need to visit a physical office to open a new account, you’re going to get left behind.

By Michael Dignam

Fintech firms are poised to revolutionize the market. They attract new investors and woo veteran investors with lower fees and a more seamless client experience. And they’ve absolutely nailed new-client onboarding: Download an app. Enter an email. Create a password. Link a bank account. And you’re done.

In under five minutes, most anyone can create a new account with a micro-investment platform; attracting Millennials in large numbers.

It’s no wonder, then, that traditional wealth management firms struggle to keep up. In the digital era, there’s a basic rule: No matter what you bring to the market, delivery better be quick, inexpensive and easy. And it begins with onboarding.

Here are three main ways wealth management firms are redefining new-client onboarding.

1. Clients are clients even before they’re clients. 

Don’t think of client onboarding simply as the process through which new accounts are opened and assets are transferred. View onboarding instead as a longer process initiated with your first customer interaction.

Onboarding is fundamentally about relationship development. Building trust and confidence, not only between the client and the advisor, but between the client and the entire firm. A great onboarding process establishes key relationship parameters, explains risk and, most importantly, facilitates a continual dialogue.   

Many firms still segment “leads,” “prospects,” and “clients.” But the lines are getting blurry. Consider that some wealth advisors deliver useful advice prior to establishing an official business relationship. Leading wealth management firms, in other words, find ways to deliver value to everyone, not just existing clients.

In a similar vein, self-serve pre-client portals are gaining popularity. Interested leads are given a flavor of the firm’s client experience via limited access to core platform functionality. Such interactions provide an opportunity for data collection at multiple stages. On the other side, wealth managers can identify follow-up opportunities by observing these interactions and gleaning valuable insight into client interests and goals.

2. The power of unwired wealth.

If your clients need to visit a physical office to open a new account, you’re going to get left behind. According to a recent report by the Roubini ThoughLab, Wealth and Asset Management 2022, already 43 percent of wealth management firms offer digital onboarding. And it is expected that nearly 70 percent will offer digital onboarding by 2022.

These numbers are undoubtedly promising, but it’s only the beginning. Mobile-enabled, express account opening is the future. Clients demand it — and it’s much more efficient for wealth managers.

According to Roubini, the highest growth in digital onboarding will come from mobile apps, which will double in use by 2022. Nearly a quarter of the industry will introduce new mobile apps in the next five years.

Imagine how easy this is: Prospects download your app. In exchange for an email address, you share access to useful tools, lots of rich information and plenty of meaningful insight. In the app, prospects can conveniently communicate with advisors and advisors can share more need-specific material.

When new clients are ready to act, they should be able to scan and upload relevant documents with only their smartphone. The entire account opening process should be quick and painless. And paperless, too. Paperless onboarding ensures cost-savings, fewer errors and happier clients.

3. Deep data integration.

The reason that it’s valuable to treat prospects like clients and deliver full mobile-enabled onboarding is because both practices can help firms achieve deep data integration. By deep integration I mean the capacity to glean data insights from all interactions and the ability to link all relevant data to each client.

The Roubini report underscores an important trend: Digital leaders are data- and analytics-driven companies. Ninety-four percent of digital leaders harness analytics across the entire enterprise. And 65 percent of all firms say that becoming a data-driven organization is a top-priority.

To achieve these goals, client onboarding should be multi-channel. A client profile that is onboarded into one line of business should easily sync with data from another line of business, or even accounts outside the firm. For example, wealth managers should be able to leverage the client’s existing brokerage profile at a retail bank, private bank, insurance or elsewhere. 

And it’s not just for smoother backend workflows or to identify cross-selling opportunity. Customers don’t want to be asked for information twice. In fact, in a perfect world, they shouldn’t be asked to input information at all.

Imagine an onboarding process in which there are no fields or forms to fill out. Firms can simply ask for inter-app permissions, whereby clients agree to link all data from their other brokerage, retirement, banking, mortgage and credit card accounts (apps already downloaded on their smartphone). Both parties could thereby aggregate an up-to-the-minute and holistic view of the client's total financial picture. And all of it can be achieved merely by clicking ‘Yes’ via the ultra-secure smartphone thumbprint.  

Customer behavior is changing.

In the new, customer-centric economy, relationships are for more fluid and freewheeling. In the wealth management industry, specifically, advisor loyalty is waning. Younger investors, in particular, rarely feel compelled to stay with a single firm.

Coke one day, Pepsi the next.

Firms that thrive in this environment will be those who can onboard new clients faster and smoother, from anywhere.

Michael Dignam is the President of Broadridge Financial Solutions (Canada)

TAGS: Prospecting
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