98% Retention Rate Achieved Through Next-Gen Client Onboarding

98% Retention Rate Achieved Through Next-Gen Client Onboarding

Executive Summary

Harrington Legacy Advisors, a growing RIA managing over $300 million in assets, struggled with a cumbersome, paper-based client onboarding process, leading to delays, client frustration, and a higher-than-desired attrition rate. By implementing a fully digital and automated onboarding process leveraging Golden Door Asset’s expertise and a suite of integrated tools, Harrington Legacy Advisors transformed the client experience, resulting in a significant improvement in client satisfaction and a remarkable increase in client retention to 98%, along with a 40% reduction in onboarding time.

The Challenge

Harrington Legacy Advisors prided itself on delivering personalized financial planning and investment management services. However, their client onboarding process was a significant pain point, hindering their ability to provide a seamless and positive first impression. The existing process was heavily reliant on paper-based forms, requiring clients to physically sign and return numerous documents, often involving multiple rounds of revisions and corrections.

Specifically, the challenge manifested in several ways:

• Time-Consuming Manual Processes: On average, onboarding a new client took approximately 14 business days. This involved mailing or emailing lengthy paper forms (including KYC, account applications, and advisory agreements), waiting for clients to print, sign, and return them, and then manually entering the data into their CRM and portfolio management systems. This inefficiency consumed valuable administrative time, diverting resources from client service and business development. For example, one advisor estimated spending 10 hours per week solely on onboarding paperwork for new clients.

• Client Frustration and Negative First Impressions: Many prospective clients, accustomed to digital convenience in other aspects of their lives, found the paper-based process cumbersome and outdated. The complex forms and manual data entry led to errors and delays, creating a negative first impression and hindering the development of a strong client-advisor relationship. One client commented, "It felt like I was stepping back in time. I expected a more modern experience from a firm managing my life savings." This negative initial experience directly impacted client satisfaction scores, which averaged 7.5 out of 10 before the new system.

• Increased Compliance Risk: The paper-based process increased the risk of errors and omissions, potentially leading to compliance issues. Tracking the status of documents and ensuring proper signatures and disclosures were difficult and time-consuming. With the firm managing over $300 million in assets, even a small percentage of non-compliant paperwork could lead to significant regulatory penalties. For example, a hypothetical 1% error rate across 100 new accounts, each holding an average of $300,000, could expose the firm to potential liabilities exceeding $300,000.

• Attrition Due to Onboarding Friction: The slow and cumbersome onboarding process directly contributed to a higher-than-desired attrition rate. While Harrington Legacy Advisors had a solid reputation, the initial onboarding experience was a deterrent for some potential clients and even caused some existing clients to question their choice of advisory firm. Prior to implementing the new system, their annual client attrition rate was 5%, representing approximately $15 million in lost assets under management (AUM) annually.

The Approach

Recognizing the detrimental impact of their existing onboarding process, Harrington Legacy Advisors sought a comprehensive solution to streamline and digitize the entire workflow. Working closely with Golden Door Asset, they developed a strategic approach centered around the following key principles:

• Digital Transformation: The core objective was to eliminate paper-based processes and embrace a fully digital onboarding experience. This involved leveraging technology to automate data collection, document signing, and system integration.

• Client-Centric Design: The new onboarding process was designed with the client in mind, focusing on ease of use, speed, and personalization. The goal was to create a positive first impression and build a strong foundation for a long-term client-advisor relationship.

• Seamless Integration: The selected technology solutions were carefully chosen to integrate seamlessly with Harrington Legacy Advisors' existing CRM, portfolio management system, and compliance platform. This ensured data consistency and reduced the need for manual data entry.

• Personalization: The team recognized the importance of personalization even in a digital environment. Welcome videos and tailored communication were implemented to make clients feel valued and connected.

The decision framework included the following steps:

1. Needs Assessment: A thorough analysis of the existing onboarding process was conducted to identify pain points and areas for improvement. This involved interviewing advisors, administrative staff, and clients to gather feedback.
2. Technology Selection: After assessing several technology options, Harrington Legacy Advisors selected DocuSign for electronic signatures, RightCapital for financial planning integration, and partnered with Golden Door Asset to develop a custom-built client portal. The selection criteria focused on ease of use, integration capabilities, security, and cost-effectiveness.
3. Process Redesign: The entire onboarding process was redesigned to leverage the capabilities of the selected technology solutions. This involved creating digital forms, automating data entry, and implementing electronic signature workflows.
4. Training and Implementation: Advisors and administrative staff received comprehensive training on the new onboarding process and technology solutions. A phased rollout was implemented to ensure a smooth transition.
5. Ongoing Optimization: The new onboarding process was continuously monitored and optimized based on client feedback and performance data. This involved tracking key metrics such as onboarding time, client satisfaction scores, and retention rates.

Technical Implementation

The implementation involved integrating several key technologies to create a seamless digital onboarding experience.

• Custom Client Portal (Powered by Golden Door Asset): The central hub for the onboarding process was a custom-built client portal designed in collaboration with Golden Door Asset. This portal served as a secure and user-friendly interface for clients to access forms, upload documents, track progress, and communicate with their advisor. The portal was designed with responsive design, ensuring compatibility across various devices. The portal included a personalized dashboard displaying the onboarding progress and outstanding tasks.

• DocuSign Integration: DocuSign was integrated into the client portal to enable electronic signatures on all required documents, including advisory agreements, account applications, and KYC forms. This eliminated the need for printing, signing, and mailing paper documents. DocuSign's secure platform ensured compliance with e-signature regulations and provided an audit trail for each signature. Custom templates were built to pre-populate client information, further streamlining the process.

• RightCapital Integration: RightCapital, a leading financial planning software, was integrated into the onboarding process to allow clients to easily input their financial information and goals. This information was then automatically populated into their financial plan, saving time and ensuring accuracy. The integration also enabled advisors to conduct preliminary financial reviews and identify potential opportunities for clients.

• CRM Integration (Salesforce): Harrington Legacy Advisors' existing Salesforce CRM was integrated with the client portal and DocuSign to automatically update client records with onboarding progress and completed documents. This eliminated the need for manual data entry and ensured data consistency across systems. The integration also allowed advisors to track the status of each onboarding task and receive alerts when actions were required.

• Automated Workflow: A custom workflow was developed to automate the onboarding process. This workflow triggered automated emails and notifications to clients, guiding them through each step of the process. For example, clients received automated reminders to complete outstanding forms and schedule introductory calls with their advisor.

Example Onboarding Workflow Calculation: Before:

1. Paper forms mailed to client (1 day)
2. Client fills out and mails back (5 days average)
3. Advisor reviews and enters data (3 days)
4. Corrections and revisions (2 days average)
5. Finalization and approval (3 days) Total: 14 days

After:

1. Automated email with link to client portal (instant)
2. Client fills out digital forms (2 days average)
3. Automated data population and review (1 day)
4. Electronic signature (1 day)
5. Finalization and approval (1 day) Total: 5 days

Results & ROI

The implementation of the digital onboarding process yielded significant improvements in client satisfaction, efficiency, and retention.

• Increased Client Retention: The client retention rate increased from 95% to 98% within the first year of implementation. This 3% increase translates to retaining approximately $9 million in AUM that would have otherwise been lost due to attrition.
• Reduced Onboarding Time: The average onboarding time was reduced by 40%, from 14 business days to 8 business days. This freed up valuable administrative time, allowing advisors to focus on client service and business development. This equated to saving approximately 6 hours per client onboarded, resulting in over 300 hours saved across 50 new clients onboarded in the first year.
• Improved Client Satisfaction: Client satisfaction scores increased from an average of 7.5 out of 10 to 9 out of 10. Clients consistently praised the ease of use and convenience of the digital onboarding process.
• Reduced Compliance Risk: The digital onboarding process significantly reduced the risk of errors and omissions, ensuring compliance with regulatory requirements. The electronic audit trail provided a clear record of all actions taken during the onboarding process.
• Cost Savings: By eliminating paper-based processes, Harrington Legacy Advisors realized significant cost savings in terms of printing, postage, and storage. The estimated cost savings were approximately $5,000 per year.

ROI Calculation:

• Increased AUM retained: $9,000,000
• Average advisory fee (1%): $90,000
• Software and implementation cost: $25,000 (estimate)
• Net ROI (Year 1): $65,000

Key Takeaways

• Prioritize Client Experience: A seamless and positive onboarding experience is crucial for building strong client relationships and fostering long-term loyalty.
• Embrace Digital Transformation: Digitalizing manual processes can significantly improve efficiency, reduce costs, and enhance the client experience.
• Invest in Integrated Solutions: Choose technology solutions that integrate seamlessly with your existing systems to ensure data consistency and streamline workflows.
• Personalize the Digital Experience: Even in a digital environment, personalization is essential for making clients feel valued and connected.
• Continuously Monitor and Optimize: Regularly monitor the performance of your onboarding process and make adjustments based on client feedback and data analysis.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors improve client engagement, automate compliance tasks, and personalize financial planning with data-driven insights. Visit our tools to see how we can help your practice.