40% Faster Onboarding: Streamlined Digital Workflow

40% Faster Onboarding: Streamlined Digital Workflow

Executive Summary

Cornerstone Wealth Management faced significant challenges with a manual, paper-based client onboarding process, leading to extended timelines and client frustration. By implementing a secure, digital onboarding platform powered by integrations, Cornerstone automated document collection, account setup, and compliance checks. The result was a 40% reduction in onboarding time and a 20% increase in client satisfaction scores related to the onboarding experience.

The Challenge

Cornerstone Wealth Management, a growing RIA managing over $750 million in assets, struggled with an increasingly inefficient client onboarding process. Before implementing a digital solution, onboarding was a heavily manual, paper-based affair. Each new client required multiple in-person meetings, the completion of lengthy paper forms, and significant back-and-forth communication to gather necessary documentation.

Specifically, the challenge manifested in several key areas:

• Time-Consuming Process: The average onboarding time was 10 business days per client. For a high-net-worth individual opening multiple accounts (e.g., taxable accounts, IRAs, and 529 plans), this could stretch to 15 days or more. This delay directly impacted the speed at which clients could begin investing, potentially costing them returns. For example, a client investing $500,000 at an average annual return of 8% would miss out on approximately $1,100 in potential gains for every week of onboarding delay.

• Error-Prone Manual Data Entry: Manually transferring data from paper forms into Cornerstone's CRM and custodian platforms was highly susceptible to errors. Data entry errors could lead to delays in account setup, incorrect allocation of assets, and compliance issues. Addressing and correcting these errors consumed valuable staff time, estimated at an average of 5 hours per new client.

• Client Frustration: The cumbersome process resulted in a negative first impression for many new clients. The constant paperwork, multiple meetings, and perceived lack of efficiency led to dissatisfaction and increased the risk of attrition early in the client relationship. Client satisfaction surveys revealed that onboarding consistently scored lower than other aspects of Cornerstone's service.

• Compliance Risks: Maintaining paper records and manually tracking compliance requirements presented challenges in ensuring adherence to regulations such as KYC (Know Your Customer) and AML (Anti-Money Laundering). The risk of non-compliance could result in significant fines and reputational damage.

• Scalability Concerns: With plans for continued growth, Cornerstone recognized that its existing onboarding process was unsustainable. The manual process would become increasingly burdensome as the firm added more clients, potentially hindering its ability to scale effectively. The firm projected that without a change, they would need to hire an additional two full-time employees within the next year solely to manage the onboarding workload. This represented an additional annual expense of approximately $120,000 in salary and benefits.

The Approach

Cornerstone Wealth Management recognized the urgent need to modernize its client onboarding process. After evaluating several solutions, they decided to implement a secure, digital onboarding platform that would automate key tasks and streamline the client experience. The strategic approach involved the following key steps:

• Process Mapping and Optimization: Cornerstone began by mapping its existing onboarding process in detail, identifying bottlenecks, redundancies, and areas for improvement. This analysis revealed that the majority of delays stemmed from manual document collection, data entry, and compliance checks.

• Technology Selection: Cornerstone selected a platform that offered robust features for electronic document signing, automated account setup, and integration with its existing CRM and custodian platforms. The decision to implement DocuSign for e-signatures was based on its widespread acceptance, security features, and ease of integration.

• Customization and Branding: The chosen platform was customized to reflect Cornerstone's brand identity and ensure a seamless client experience. This included customizing the platform's interface, incorporating Cornerstone's logo and color scheme, and tailoring the onboarding workflow to match the firm's specific processes.

• Integration with Existing Systems: A key component of the approach was to integrate the new onboarding platform with Cornerstone's existing CRM (Salesforce) and custodian platforms (Schwab and Fidelity). This integration allowed for seamless data transfer between systems, eliminating the need for manual data entry and reducing the risk of errors.

• Client Communication and Training: Cornerstone implemented a comprehensive communication plan to educate clients about the new onboarding process and provide support as needed. This included creating instructional videos, offering online tutorials, and providing dedicated phone support. Internal training was also conducted to ensure that all staff members were proficient in using the new platform.

• Phased Rollout: To minimize disruption, Cornerstone implemented the new onboarding platform in a phased approach. They began by piloting the platform with a small group of new clients and gradually expanded its use to all new clients over a period of several weeks.

• Compliance and Security Considerations: Data security was paramount. The selected platform and integrations needed to meet strict compliance requirements including data encryption, two-factor authentication, and SOC 2 compliance.

Technical Implementation

The technical implementation of Cornerstone's digital onboarding platform involved several key components and integrations:

• DocuSign Integration: DocuSign was integrated to enable clients to electronically sign all necessary documents, including account opening agreements, advisory agreements, and privacy policies. This eliminated the need for paper-based forms and reduced the time required to obtain signatures. DocuSign's security features, including audit trails and tamper-evident seals, ensured the integrity of the signed documents.

• CRM Integration (Salesforce): The onboarding platform was integrated with Cornerstone's Salesforce CRM to automatically populate client data and track onboarding progress. This integration eliminated the need for manual data entry and provided a centralized view of client information. When a new client entered the onboarding workflow, their contact information, financial goals, and risk tolerance were automatically synced to Salesforce.

• Custodian Platform Integrations (Schwab and Fidelity): Integrations with Schwab and Fidelity allowed for automated account setup and funding. Once a client completed the onboarding process, the platform automatically created the necessary accounts and initiated the transfer of funds. This significantly reduced the time required to open accounts and begin investing. API calls were used to seamlessly transfer client data from the onboarding platform to the custodian platforms, ensuring accuracy and efficiency. Specific APIs used included the Schwab OpenView Gateway API and the Fidelity Wealthscape API.

• Automated Compliance Checks: The platform incorporated automated compliance checks to ensure adherence to KYC and AML regulations. This included automated identity verification, background checks, and watchlist screening. The system automatically flagged any potential red flags, allowing Cornerstone's compliance team to investigate further.

• Secure Data Storage: All client data was stored securely in the cloud, with encryption both in transit and at rest. The platform's security infrastructure was SOC 2 compliant and underwent regular security audits to ensure data protection. Specific encryption standards used included AES-256 encryption for data at rest and TLS 1.2 for data in transit.

• Workflow Automation: The entire onboarding process was automated using workflow automation tools within the platform. This included automated email notifications, task assignments, and progress tracking. The system automatically triggered the next step in the process based on the client's actions, ensuring a smooth and efficient workflow.

• Data Calculation Examples:

  • Calculation of onboarding time saved: Pre-implementation 10 days to onboard to post-implementation 6 days to onboard means a 4-day reduction or (4 days / 10 days) = 40% reduction in onboarding time.
  • Calculation of potential investment gains realized from faster onboarding: Assume $500,000 client with 8% annual return. Previously, 10 day onboarding now 6 day onboarding. Saves 4 days. (4 days/365 days) * ($500,000 * 0.08) = $438.36 in realized gains because of faster onboarding.

Results & ROI

The implementation of the digital onboarding platform yielded significant positive results for Cornerstone Wealth Management:

• Reduced Onboarding Time by 40%: The average onboarding time decreased from 10 business days to 6 business days. This improvement allowed clients to begin investing sooner, maximizing their potential returns. This translates to saving of 4 days per client onboarded.

• Improved Client Satisfaction by 20%: Client satisfaction scores related to onboarding increased by 20%, as measured by post-onboarding surveys. Clients reported a more efficient, convenient, and user-friendly experience.

• Reduced Data Entry Errors by 75%: The automation of data entry significantly reduced the number of errors, minimizing the risk of compliance issues and improving data accuracy. This resulted in an estimated savings of 4 hours of staff time per client.

• Increased Staff Efficiency by 25%: By automating key tasks, the onboarding platform freed up staff time, allowing them to focus on more strategic activities such as client relationship management and business development. Cornerstone was able to avoid hiring an additional employee, saving approximately $120,000 per year.

• Improved Compliance: The automated compliance checks and secure data storage enhanced Cornerstone's ability to meet regulatory requirements and protect client data. This reduced the risk of non-compliance and potential fines.

• Increased Throughput: The streamlining of the onboarding process allowed Cornerstone to onboard 30% more new clients per month.

• Financial Impact:

  • Cost savings by avoiding an additional hire: $120,000 per year
  • Estimated increase revenue from onboarding 30% more clients: To calculate, needs information about avg AUM and fees earned per client, which wasn't provided in the prompt.

Key Takeaways

The success of Cornerstone Wealth Management's digital onboarding initiative provides several key takeaways for other RIAs:

1. Embrace Automation: Automating manual processes can significantly reduce onboarding time, improve data accuracy, and free up staff time. Identify areas where automation can streamline your workflow and improve efficiency.
2. Prioritize Client Experience: A positive onboarding experience is crucial for building strong client relationships. Invest in technology that makes the process easy, convenient, and user-friendly.
3. Integrate Systems: Integrating your onboarding platform with your CRM and custodian platforms is essential for seamless data transfer and workflow automation. This integration eliminates the need for manual data entry and reduces the risk of errors.
4. Focus on Security: Data security is paramount when handling sensitive client information. Choose a platform with robust security features and ensure compliance with relevant regulations.
5. Measure and Optimize: Track key metrics such as onboarding time, client satisfaction, and data entry errors to measure the effectiveness of your onboarding process. Continuously optimize your process based on these metrics to drive further improvements.

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