98% Retention Rate with White-Glove Onboarding Experience

98% Retention Rate with White-Glove Onboarding Experience

Executive Summary

Cornerstone Wealth Management was struggling with significant client churn within the first 90 days of onboarding, directly impacting their Assets Under Management (AUM) growth and overall profitability. By implementing a high-touch, "white-glove" onboarding experience that included personalized welcome kits, dedicated phone calls, in-person meetings, and comprehensive educational resources, Cornerstone successfully transformed their client experience. This resulted in a dramatic increase in client retention, soaring to an impressive 98% and effectively eliminating 90-day churn.

The Challenge

Cornerstone Wealth Management, a growing RIA with $500 million in AUM, prided itself on offering personalized financial planning and investment management services. However, they faced a critical challenge: a high rate of client attrition during the initial 90 days of the client-advisor relationship. This early churn not only impacted revenue but also damaged advisor morale and hindered the firm’s ability to scale effectively.

Specifically, Cornerstone’s data revealed that they were losing an average of 8% of new clients within the first three months. This meant that for every 100 new clients brought on board, 8 would leave, often taking their assets with them. With an average client portfolio size of $250,000, this churn translated to a loss of $200,000 in AUM per 100 new clients within the critical onboarding period.

Digging deeper, Cornerstone discovered several contributing factors:

• Lack of Initial Engagement: New clients felt overwhelmed by the volume of paperwork and compliance documentation required during onboarding. They often lacked a clear understanding of the firm's investment philosophy and how it aligned with their individual financial goals.
• Limited Personal Contact: While advisors were technically assigned to new clients, the initial interactions were often transactional and impersonal. Clients felt like just another number and didn't develop a strong sense of connection with their advisor or the firm.
• Unclear Expectations: Many clients were unclear about the ongoing support and communication they could expect from Cornerstone after the initial paperwork was completed. This uncertainty led to anxiety and a feeling of being left in the dark.
• Competitive Pressure: Competitor firms, particularly larger national brokerages, were actively targeting Cornerstone's new clients with aggressive marketing campaigns and promises of superior service. The lack of a strong initial connection made it easier for clients to be swayed by these offers.

The financial impact of this churn was significant. Cornerstone estimated that each lost client cost the firm approximately $2,000 in lost revenue annually (based on a 1% AUM fee). More importantly, the high churn rate was creating a negative feedback loop: advisors were spending more time trying to retain clients instead of focusing on acquiring new ones, further hindering the firm's growth. The partners recognized that a strategic shift was needed to address this critical issue and create a more positive and engaging onboarding experience.

The Approach

To combat the high churn rate, Cornerstone implemented a comprehensive "white-glove" onboarding program designed to provide new clients with a personalized and engaging experience from day one. This involved a multi-faceted approach that addressed the key pain points identified during the initial analysis.

1. Customized Welcome Kit: Cornerstone redesigned its onboarding materials to create a visually appealing and informative welcome kit. This kit included:

• A personalized welcome letter from the client's assigned advisor, outlining their commitment to the client's financial well-being.
• A detailed overview of Cornerstone's investment philosophy, including case studies and testimonials showcasing the firm's success.
• A clear explanation of the client's portfolio allocation and how it aligns with their individual financial goals.
• A calendar of upcoming events and webinars designed to educate clients on relevant financial topics.
• A small, branded gift as a token of appreciation (e.g., a high-quality journal, a custom pen).

2. Proactive Phone Calls: Instead of relying solely on email communication, Cornerstone implemented a series of proactive phone calls from the client's advisor during the first 30 days. These calls were designed to:

• Welcome the client to the firm and express appreciation for their business.
• Answer any questions the client may have about their account or the onboarding process.
• Schedule an in-person or virtual meeting to discuss the client's financial goals in more detail.
• Provide regular updates on the progress of the account setup and any outstanding tasks.

3. In-Person Meetings (or Virtual Equivalents): Cornerstone emphasized the importance of face-to-face interaction (or virtual meetings via video conferencing) to build rapport and establish a strong personal connection with new clients. These meetings were used to:

• Review the client's financial plan and investment strategy in detail.
• Address any concerns or objections the client may have.
• Build trust and confidence in the advisor's expertise.
• Establish clear expectations for ongoing communication and support.

4. Educational Resources: Cornerstone developed a library of educational resources, including articles, videos, and webinars, designed to help clients better understand key financial concepts and investment strategies. These resources were made available to new clients through a dedicated online portal and were also shared proactively by advisors during phone calls and meetings.

5. Feedback Mechanisms: Cornerstone implemented a system for gathering feedback from new clients during the onboarding process. This included:

• A short online survey sent after the welcome kit was received.
• A follow-up phone call from a dedicated onboarding specialist to address any concerns or issues.
• A formal client satisfaction survey sent after 90 days.

The strategic thinking behind this approach was to create a positive and memorable first impression that would differentiate Cornerstone from its competitors and foster long-term client loyalty. By proactively engaging with new clients, providing them with personalized attention, and empowering them with knowledge, Cornerstone aimed to build strong relationships based on trust and mutual understanding.

Technical Implementation

Cornerstone leveraged their existing Salesforce CRM system to manage and track the white-glove onboarding program. They customized Salesforce to create specific onboarding workflows and automated several key tasks.

• Automated Welcome Email Sequences: Upon signing a new client agreement, the Salesforce system automatically enrolled the client in a personalized welcome email sequence. This sequence included a series of emails designed to introduce the client to Cornerstone, provide them with essential information about their account, and encourage them to engage with the firm's educational resources.
• Task Management and Reminders: Salesforce was used to create a series of tasks for the client's advisor, ensuring that all key onboarding activities were completed in a timely manner. These tasks included sending the welcome kit, scheduling phone calls, and arranging in-person meetings. Automated reminders were set up to notify advisors of upcoming tasks and deadlines.
• Client Segmentation: Salesforce was used to segment new clients based on their demographics, investment goals, and risk tolerance. This allowed Cornerstone to personalize the onboarding experience and tailor the communication and educational resources to each client's specific needs.
• Performance Tracking and Reporting: Salesforce was used to track key metrics related to the onboarding program, such as client engagement, satisfaction scores, and retention rates. This data was used to identify areas for improvement and to measure the effectiveness of the program over time.
• Integration with Portfolio Management System: Cornerstone integrated Salesforce with their portfolio management system to provide advisors with a comprehensive view of each client's account information. This allowed advisors to quickly and easily access the data they needed to provide personalized advice and support.

The calculation of the impact of churn was based on the following formulas:

• AUM Lost due to Churn: (Churn Rate (%) * Number of New Clients) * Average Client Portfolio Size
• Revenue Lost Annually per Client: Average Client Portfolio Size * Annual AUM Fee (%)

These formulas allowed Cornerstone to quantify the financial impact of churn and to track the progress of the white-glove onboarding program in reducing attrition.

Results & ROI

The implementation of the white-glove onboarding program yielded remarkable results, significantly improving client retention and boosting overall firm performance.

• Client Retention Rate: Prior to the implementation, Cornerstone's client retention rate within the first 90 days was 92%. After implementing the white-glove program, the retention rate jumped to 98%, representing a significant improvement.
• 90-Day Churn Rate: The 90-day churn rate plummeted from 8% to 0%. This meant that virtually no new clients were leaving the firm within the critical onboarding period.
• AUM Growth: With the dramatic reduction in churn, Cornerstone experienced a significant boost in AUM growth. The firm projected an additional $1.2 million in AUM retained per year, based on the increased retention rate and average client portfolio size.
• Advisor Productivity: By reducing the time and effort spent on client retention, advisors were able to focus more on acquiring new clients and providing proactive financial planning services. This resulted in increased advisor productivity and overall firm profitability.
• Client Satisfaction: Client satisfaction scores significantly increased as a result of the personalized and engaging onboarding experience. This positive feedback was reflected in client testimonials and referrals, further fueling the firm's growth.

Specifically, within one year of implementing the white-glove program, Cornerstone saw these improvements:

• New Client Acquisition Cost Reduction: Because of the high retention rates and client referrals, the firm saw a 15% reduction in marketing expenses spent to acquire each new client, realizing approximately $500 dollars per client.
• Average Client Lifetime Value Increase: Because clients were staying with the firm, Cornerstone projected that the average client lifetime value grew by $10,000.

The financial ROI of the white-glove onboarding program was substantial, far outweighing the initial investment in developing and implementing the program. The program not only saved the firm from losing existing clients and their associated AUM but also created a more positive and engaging experience that attracted new clients and boosted overall firm profitability.

Key Takeaways

Here are some key takeaways for other RIAs and wealth management firms looking to improve their client retention rates:

1. Prioritize the Onboarding Experience: Invest time and resources in creating a personalized and engaging onboarding experience for new clients. This is the first impression that will shape their perception of your firm and influence their decision to stay with you.
2. Communicate Proactively and Clearly: Keep new clients informed about their account setup, investment strategy, and the ongoing support they can expect from your firm. Regular communication is key to building trust and managing expectations.
3. Personalize Your Approach: Tailor the onboarding experience to each client's individual needs and preferences. This demonstrates that you understand their unique financial goals and are committed to helping them achieve success.
4. Leverage Technology to Streamline the Process: Use technology to automate tasks, track progress, and gather feedback. This will free up your advisors to focus on building relationships with clients and providing personalized advice.
5. Measure and Optimize: Track key metrics related to your onboarding program, such as client engagement, satisfaction scores, and retention rates. Use this data to identify areas for improvement and continuously optimize your approach.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors identify new opportunities within their existing book of business. Visit our tools to see how we can help your practice.