40% Faster Onboarding with Automated IPS Generation
Executive Summary
Richardson & Associates, a leading RIA managing over $750 million in assets, faced a significant bottleneck in their client onboarding process due to the time-consuming manual creation of Investment Policy Statements (IPS). Golden Door Asset implemented an automated IPS generation tool that seamlessly integrated with their existing CRM. This resulted in a 40% reduction in onboarding time, allowing advisors to dedicate more time to client relationships and business development.
The Challenge
Richardson & Associates prides itself on providing personalized financial planning services to high-net-worth individuals. However, the firm's growth was being hampered by a time-consuming client onboarding process. A significant portion of this time was dedicated to manually creating Investment Policy Statements (IPS).
The process involved advisors gathering information from clients, including their financial goals, risk tolerance, time horizon, and specific investment preferences. This information was then manually entered into a template to generate the IPS document. On average, creating a single IPS took an advisor 6-8 hours. With each advisor onboarding approximately 3 new clients per month, this translates to 18-24 hours per month spent solely on IPS creation.
Beyond the significant time commitment, the manual process also presented several other challenges:
- Inconsistency: Different advisors sometimes interpreted client information differently, leading to variations in the resulting IPS documents. This lack of standardization created potential compliance risks and made it difficult to compare IPS across clients.
- Scalability: As the firm continued to grow, the manual IPS creation process became increasingly unsustainable. Scaling the team to handle the growing workload meant hiring more advisors, which increased overhead costs.
- Delayed Investment Deployment: The lengthy onboarding process delayed the deployment of client assets, impacting potential investment returns. For example, a delay of two weeks in investing $500,000 could result in a loss of $384.62 assuming an annualized return of 7% (calculated as $500,000 * 0.07 / 52 weeks * 2 weeks = $1,346.15; opportunity cost).
These challenges prompted Richardson & Associates to seek a solution that would streamline their IPS creation process, improve efficiency, and enable advisors to focus on higher-value activities.
The Approach
Golden Door Asset worked closely with Richardson & Associates to understand their specific needs and challenges related to IPS generation. After a thorough assessment, we proposed implementing an automated IPS generation tool integrated with their existing Salesforce CRM and Riskalyze risk assessment platform.
Our approach was based on the following key principles:
- Data Integration: Leverage existing data sources to minimize manual data entry and ensure data accuracy. This involved integrating the IPS generation tool with Salesforce to automatically pull client demographic and financial information, and with Riskalyze to import client risk tolerance scores.
- Customization & Flexibility: Provide advisors with the ability to customize the IPS document to reflect the unique needs and circumstances of each client. This involved creating a flexible template that could be easily modified to include specific investment recommendations, asset allocation strategies, and other relevant information.
- Workflow Automation: Automate the IPS approval process to ensure compliance and minimize delays. This involved configuring custom workflows that automatically routed the IPS document to the appropriate personnel for review and approval.
- User-Friendly Interface: Design an intuitive and user-friendly interface that would allow advisors to easily generate and customize IPS documents without requiring extensive technical expertise.
We chose to utilize the Riskalyze API due to its ability to comprehensively capture and quantify client risk tolerance. This allowed us to automatically generate risk-aligned investment recommendations within the IPS, further streamlining the process. We opted to build the automated IPS generation as an app within Salesforce so the information would stay in one place.
By focusing on data integration, customization, workflow automation, and user-friendliness, we were able to develop a solution that addressed Richardson & Associates' specific needs and provided significant value.
Technical Implementation
The technical implementation involved a multi-faceted approach to integrate seamlessly with Richardson & Associates’ existing technology infrastructure:
- API Integration: We established a secure API connection between the Golden Door Asset automated IPS generation tool, Salesforce CRM, and Riskalyze. The Salesforce API was used to extract client demographic data, investment goals, and financial holdings. The Riskalyze API was crucial for retrieving a client’s Risk Number, which quantifies their risk tolerance on a scale of 1 to 99. This risk score served as a foundational input for the IPS asset allocation strategy.
- IPS Template Design: We designed a customizable IPS template in a user-friendly format (e.g., Microsoft Word or PDF) that allowed advisors to easily modify the document. The template included placeholders for client-specific information pulled from Salesforce and Riskalyze, as well as sections for advisors to add their own personalized recommendations and insights. We utilized conditional logic within the template to dynamically adjust the asset allocation based on the client's Risk Number. For example, a client with a Risk Number of 30 might have an asset allocation of 80% fixed income and 20% equities, while a client with a Risk Number of 70 might have an allocation of 30% fixed income and 70% equities.
- Workflow Automation: We configured custom workflows within Salesforce to automate the IPS approval process. Once an advisor generated an IPS document, it was automatically routed to a compliance officer for review and approval. The compliance officer could then approve the IPS or send it back to the advisor for revisions. This ensured that all IPS documents met the firm's compliance standards before being presented to clients.
- Data Mapping: We implemented robust data mapping procedures to ensure that data was accurately transferred between Salesforce, Riskalyze, and the IPS generation tool. This involved mapping specific fields in Salesforce and Riskalyze to the corresponding placeholders in the IPS template. We also implemented data validation checks to identify and correct any data errors before generating the IPS document. For instance, an acceptable range for "Net Worth" was defined, flagging instances of impossible or improbable figures (e.g., a net worth entered as "$1" instead of "$1,000,000").
- Security Considerations: We implemented industry-standard security measures to protect client data throughout the integration process. This included encrypting all data in transit and at rest, and implementing access controls to restrict access to sensitive data.
By leveraging APIs, customizable templates, and workflow automation, we created a robust and efficient automated IPS generation solution that integrated seamlessly with Richardson & Associates' existing technology infrastructure.
Results & ROI
The implementation of the automated IPS generation tool yielded significant improvements in Richardson & Associates' client onboarding process and overall efficiency:
- Reduced Onboarding Time by 40%: The average time to create an IPS decreased from 6-8 hours to 3-5 hours, resulting in a 40% reduction in onboarding time.
- Increased Advisor Capacity: By freeing up advisors from spending excessive time on IPS creation, they were able to dedicate more time to client relationship management and new business development. Advisors reported an increase of approximately 10% in time spent on client meetings and prospecting activities.
- Improved Client Satisfaction: The faster onboarding process and more personalized IPS documents resulted in improved client satisfaction. A post-implementation survey revealed a 15% increase in client satisfaction scores related to the onboarding experience.
- Faster Investment Deployment: The streamlined onboarding process enabled Richardson & Associates to deploy client assets more quickly, leading to increased investment returns. As an example, a $1 million portfolio could be invested approximately 7 days faster than before. Assuming an annualized return of 7%, this translates to approximately $1,346 in additional returns during the initial investment period ($1,000,000 * 0.07 / 52 weeks * 1 week = $1,346.15).
- Cost Savings: The reduced onboarding time and increased advisor capacity resulted in significant cost savings. The firm estimates that it saved approximately $15,000 per advisor per year in reduced administrative costs. This calculation is based on the assumption that advisors bill their time at approximately $200 per hour. By saving 2-3 hours per IPS creation and onboarding approximately 3 new clients per month, this results in savings of approximately $1200-$1800 per month, or $14,400-$21,600 per year.
- Enhanced Compliance: The standardized IPS generation process improved compliance and reduced the risk of errors and omissions. The automated workflow ensured that all IPS documents were reviewed and approved by a compliance officer before being presented to clients.
Overall, the automated IPS generation tool provided significant value to Richardson & Associates, enabling them to improve efficiency, enhance client satisfaction, and drive business growth.
Key Takeaways
Here are some key takeaways for other RIAs looking to streamline their client onboarding process:
- Embrace Automation: Identify manual and time-consuming tasks in your onboarding process and explore opportunities to automate them. Automating tasks like IPS generation can free up valuable time for advisors to focus on client relationships and new business development.
- Integrate Your Technology: Ensure that your technology systems are seamlessly integrated to minimize manual data entry and improve data accuracy. Integrate your CRM, risk assessment tools, and portfolio management systems to create a streamlined workflow.
- Prioritize Client Experience: Focus on improving the client experience throughout the onboarding process. A faster and more personalized onboarding experience can lead to increased client satisfaction and loyalty.
- Quantify the Benefits: Track the results of your onboarding improvements to measure the ROI and identify areas for further optimization. Quantify the impact of automation on onboarding time, advisor capacity, and client satisfaction.
- Security First: Always prioritize data security when implementing new technology solutions. Ensure that all data is encrypted and that appropriate access controls are in place to protect client information.
About Golden Door Asset
Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors personalize client experiences and drive sustainable growth. Visit our tools to see how we can help your practice.