This publication and onbarding firm Appway recently launched a new study examining client onboarding trends. Kicking off debate is the co-founder of online matching service findaWEALTHMANAGER.com

WealthBriefingAsia , sister publication to WealthBriefing, and Appway recently launched a new study examining client onboarding trends in wealth management. The report’s findings will be revealed at a series of thought-leadership events this autumn, but we will be canvassing opinion from across the industry in months leading up. (To see how to take part in the study, click on this link.) Kicking off the debate is Dominic Gamble, co-founder of the online matching service findaWEALTHMANAGER.com and a former private banker internationally.

You spent years as a private banker and now speak to end-clients about their wealth management experiences all the time. How would you say the general state of client onboarding stands?

Client onboarding is becoming an increasingly serious problem for wealth managers on several fronts.

From what we’re seeing, firms both large and small seem to be struggling to implement the kind of efficient onboarding processes they need to cope with the increased regulatory burden. The industry’s use of technology continues to improve, but years of widespread under-investment mean that many wealth managers are still using a mishmash of various systems (and paper records) to onboard new clients – with obvious consequences for their operational efficiency and cost base.

But it’s the impact that inefficient onboarding has on the client experience which should be the real worry. Onboarding is a particularly sensitive time in the relationship between the client and wealth manager. It is when the firm needs to be demonstrating its proficiency in dealing with complex financial affairs and its commitment to excellent service. However, at just the point when relationship managers will be looking to inspire confidence in their incoming clients many find their firm’s systems and processes let them down. It’s very difficult to recover from a poor first impression and it’s safe to assume that being subjected to a circumlocutory, error-bound onboarding process will cool the ardour of even the most enthusiastic new client.  
From your experience, what are the biggest pain points for clients during onboarding?

One of the biggest complaints we hear from clients is “Why is this taking so long?” followed closely by “Why do they want so much information from me?” We think this indicates a real need for better communication between wealth managers and their incoming clients, so that expectations are correctly managed and frustrations kept to a minimum. Are wealth managers properly explaining all the processes involved and how long each is likely to take? Do clients know precisely what all the various bits of information they are being asked to produce are for? I would say probably not in many cases, despite the fact that requirements like KYC information are eminently justifiable and easy to explain. Communicating clearly with clients, even on banal administrative issues, is foundational to relationship-building. Furthermore, if clients had a clearer view of the number of steps and checks involved in their onboarding, and could see their progress, they may well be more forgiving of delays (which also might down to the client’s preceding wealth manager rather than the new one).

The third major pain point is every client’s nightmare: endless, repetitious form-filling. It may be the year 2014, but great swathes of the industry are still having to resort to paper-based workarounds to satisfy the ever-changing requirements of regulators. Only a small proportion of wealth managers have implemented a slick, end-to-end automated onboarding system and it often comes as a surprise for more tech-savvy clients to be confronted with reams of paper. Digital capabilities are in fact a key differentiator in wealth management today, so we’re now making much more of this factor in our client-institution matching process.

How do think relationship managers feel about onboarding in general?

I think I can speak for many relationship managers when I say that in my former career the sense of elation I got when meeting a new client quickly evaporated when I had to prepare their account opening document pack. This often required two sets of jurisdictional documentation if I was opening an account offshore, and that would mean different branding and styles of documentation would be complicating things from the off. Then there was the tricky process of pulling documents off of various intranet portals, with the added pressure of knowing that if you got one wrong the whole account opening process would stall until the correct documentation got signed.

The most stressful thing of all was the physical signing of the documents, in fact. If we sent them by post then they needed to be painstakingly marked up to show where clients should sign, but woe betide any slip of the pen because our friends in the Luxembourg booking centre would reject the whole pack if there was one word crossed out on any form.

Perhaps even worse were the long and confusing face-to-face signing sessions. The client would say, “Erm, I thought I just signed this form” and you would then have to explain that they indeed have, but that it was only for the offshore booking centre. They might then have to add multiple signatures to stacks of repetitive legal disclaimers and so on, having already supplied a huge amount of information and documentation. It’s no wonder clients can feel exasperated and their advisors very awkward indeed during this process.

The bottom line is that onboarding can be a very fiddly and embarrassing process which can be very detrimental to the speed of account opening – or even the account opening itself, if things go badly awry. Cost-savings aside, firms need to be thinking about how they can make onboarding less frustrating for both clients and advisors. It’s not hard to see how this could positively impact the bottom line.