40% Faster Onboarding with Automated Data Migration
Executive Summary
Reeves Institutional Advisors faced significant delays and inaccuracies during client onboarding due to the manual transfer of data from various legacy systems. By partnering with a data aggregation service and automating data extraction, mapping, and verification, Reeves decreased onboarding time by 40%. This efficiency gain freed up valuable staff time, allowing them to focus on client relationship management and new business development, ultimately driving faster growth and increased client satisfaction.
The Challenge
Jonathan Reeves, founder of Reeves Institutional Advisors, a rapidly growing RIA firm managing over $350 million in assets, recognized a critical bottleneck in their onboarding process. Each new client, typically transferring assets from a previous advisor or a self-managed platform, presented a unique data migration challenge.
The firm was heavily reliant on a manual, labor-intensive process. Client statements, often in disparate formats (PDFs, spreadsheets, even physical documents), had to be individually reviewed. Data, including account balances, asset allocations, transaction history, and cost basis information, was manually entered into Reeves' portfolio management system. This process was not only time-consuming but also highly susceptible to errors, leading to reconciliation headaches and potential inaccuracies in client reporting.
Consider a scenario where a prospective client, Dr. Emily Carter, wanted to transfer her $1.2 million portfolio, distributed across three different brokerage accounts and an inherited IRA, to Reeves Institutional Advisors. Manually extracting and entering this data would typically take a dedicated team member upwards of 12 hours, spanning multiple days. This included deciphering complex statements, accurately recording each individual asset's purchase date and cost basis, and ensuring consistency across all accounts.
These delays directly impacted the client experience. Dr. Carter, eager to see her portfolio optimized and integrated into Reeves' platform, experienced frustration with the prolonged onboarding. Such negative experiences could lead to early attrition and damage the firm's reputation.
Furthermore, the manual data entry process diverted valuable time from Reeves' advisors and support staff. Time that could have been spent proactively engaging with clients, developing new investment strategies, or pursuing new business opportunities was instead consumed by tedious data management. Reeves estimated that manual data entry was costing the firm approximately $30,000 per year in lost productivity. This inefficiency hindered their ability to scale the business and effectively serve their growing client base. The team knew that if they wanted to grow assets under management by 20% in the next year, streamlining onboarding was essential.
The Approach
Jonathan Reeves understood that to overcome these challenges and unlock growth, Reeves Institutional Advisors needed a more efficient and accurate data migration solution. He investigated several options, including hiring additional support staff and exploring different portfolio management software. However, he ultimately concluded that automating the data extraction and transfer process was the most sustainable and scalable solution.
After researching various data aggregation services, Reeves decided to partner with ByAllAccounts, a leading provider of financial data aggregation APIs. ByAllAccounts offered a comprehensive solution that could automatically pull data from a wide range of custodians and brokerages, regardless of the format or platform.
The decision-making framework revolved around three key criteria:
- Accuracy: The chosen solution had to guarantee a high level of data accuracy to minimize reconciliation errors and ensure reliable reporting.
- Efficiency: The solution had to significantly reduce the time and effort required for data migration, freeing up staff time for higher-value activities.
- Integration: The solution had to seamlessly integrate with Reeves Institutional Advisors' existing portfolio management system and workflows.
ByAllAccounts met these criteria by providing a robust API that allowed Reeves to:
- Automate Data Extraction: Connect to clients' existing brokerage accounts and automatically extract portfolio data, including account balances, asset allocations, transaction history, and cost basis information.
- Standardize Data Formats: Transform data from various custodians into a standardized format that could be easily imported into Reeves' portfolio management system.
- Map Data Fields: Accurately map data fields from different custodians to the corresponding fields in Reeves' system, ensuring data consistency and accuracy.
- Implement Data Verification: Integrate automated data verification processes to identify and correct any discrepancies or errors.
The strategic thinking was based on the understanding that data is the lifeblood of any financial advisory firm. By automating the flow of data, Reeves Institutional Advisors could not only improve efficiency but also enhance the quality of their client service and make more informed investment decisions.
Technical Implementation
The implementation of the ByAllAccounts API involved a phased approach, starting with a pilot program and gradually expanding to all new clients.
- API Integration: Reeves' technology team worked closely with ByAllAccounts to integrate the API into their existing portfolio management system. This involved configuring the API to connect to the relevant custodians and mapping data fields from different custodians to the corresponding fields in Reeves' system.
- Data Mapping & Transformation: A custom data mapping solution was developed to ensure that data was accurately transferred from various sources to the firm’s core platform. This involved creating transformation rules to convert data from different formats into a standardized format that could be easily imported. For instance, CUSIP numbers were verified against a master database to ensure accuracy, and security types were normalized across different custodians.
- Automated Verification: Automated data verification processes were implemented to identify and correct any discrepancies or errors. This included comparing data from multiple sources and flagging any inconsistencies for review. For example, the system would flag discrepancies in the reported cost basis for securities held at different custodians, allowing staff to investigate and correct any errors.
- Security Measures: Robust security measures were implemented to protect client data during the transfer process. This included encrypting data in transit and at rest, implementing access controls to restrict unauthorized access, and regularly auditing the system for vulnerabilities. Data was encrypted using AES-256 encryption and stored in a secure, SOC 2-compliant data center.
- Workflow Integration: The automated data migration process was seamlessly integrated into Reeves Institutional Advisors' existing onboarding workflow. When a new client signed up, the system automatically initiated the data extraction process and notified the advisor when the data was ready for review.
To quantify the impact of the implementation, the team tracked key metrics such as:
- Onboarding Time: The average time required to onboard a new client.
- Data Accuracy: The number of errors identified during data verification.
- Staff Time Savings: The amount of time saved by automating the data migration process.
The entire implementation took approximately 6 weeks and required close collaboration between Reeves' technology team and ByAllAccounts' support staff. The total cost of implementation, including API integration, data mapping, and training, was estimated at $15,000.
Results & ROI
The implementation of the automated data migration solution yielded significant results for Reeves Institutional Advisors.
- 40% Reduction in Onboarding Time: The average time required to onboard a new client decreased from 15 hours to 9 hours, representing a 40% reduction. For Dr. Carter's $1.2 million portfolio, the onboarding time was reduced from approximately 12 hours to just under 7 hours.
- Improved Data Accuracy: The number of errors identified during data verification decreased by 75%, resulting in more accurate client reporting and reduced reconciliation headaches.
- Significant Staff Time Savings: The firm estimated that automating the data migration process saved approximately 500 staff hours per year, freeing up valuable time for client relationship management and new business development.
- Increased Client Satisfaction: Clients reported a higher level of satisfaction with the onboarding process, citing the speed and efficiency of the data transfer.
- Increased Revenue Generation: The staff time savings allowed Reeves to take on 15 more high-net-worth clients last year, generating an additional $75,000 in annual revenue.
- Estimated ROI: Based on the staff time savings and increased revenue generation, Reeves Institutional Advisors estimated a return on investment of over 300% within the first year. The $15,000 investment in the ByAllAccounts implementation yielded an estimated $45,000 in cost savings and revenue increases in the first year alone.
Before the automation, Reeves was onboarding roughly 3 clients per month with the existing team. After the automation, they increased that to 5 clients per month without needing to hire additional staff. The improved efficiency helped Reeves Institutional Advisors scale their business and achieve their growth targets.
Key Takeaways
- Automate repetitive tasks: Identify manual, time-consuming tasks within your firm and explore automation solutions to improve efficiency. Data migration, compliance reporting, and portfolio rebalancing are all prime candidates for automation.
- Invest in data accuracy: Prioritize data quality and implement robust data verification processes to minimize errors and ensure reliable reporting. The cost of inaccurate data far outweighs the investment in data quality control measures.
- Focus on client experience: Streamline your onboarding process to provide a seamless and efficient experience for new clients. A positive onboarding experience can set the tone for a long and successful client relationship.
- Choose the right technology partner: Select technology partners that offer robust solutions, excellent customer support, and seamless integration with your existing systems. Don't be afraid to ask for case studies and references to validate their claims.
- Measure and track results: Track key metrics to measure the impact of your technology investments and identify areas for improvement. Regularly review your processes and make adjustments as needed to optimize performance.
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