David Park Drives 40% Faster Client Onboarding with Digital Workflow

David Park Drives 40% Faster Client Onboarding with Digital Workflow

Executive Summary

Summit Capital Partners, a growing RIA managing over $750 million in assets, faced a major bottleneck in their client onboarding process, leading to delayed revenue recognition and a subpar client experience. Golden Door Asset partnered with Summit to digitize and automate their onboarding workflow, implementing electronic forms, integrated KYC/AML checks, and secure bank verification. This resulted in a 40% reduction in onboarding time, translating to faster revenue generation and a 25% increase in client satisfaction scores.

The Challenge

Summit Capital Partners prided itself on its personalized financial planning and investment strategies. However, their client onboarding process, heavily reliant on manual paperwork and back-and-forth communication, was a significant pain point. The process typically took an average of 10 business days to complete, from initial client meeting to account funding.

David Park, the firm's Chief Operating Officer, recognized the inefficiencies. "Our advisors were spending too much time chasing down signatures and verifying information," he explained. "A significant portion of their day was dedicated to administrative tasks instead of focusing on client relationships and investment strategies."

The cumbersome onboarding process also had a direct impact on revenue. With an average client investment of $250,000 and a management fee of 1% annually, each day of delay in onboarding translated to roughly $6.85 of lost potential revenue per client. Multiplied across multiple new clients each month, these delays added up to a substantial financial impact. Furthermore, clients expressed frustration with the extensive paperwork and redundant information requests. A recent client satisfaction survey revealed that the onboarding process received an average rating of 3.5 out of 5, highlighting the need for improvement. The manual process created compliance risks. Manual data entry increased the potential for human error, which could lead to compliance violations and potential fines. They spent an estimated $1,500 per month in express mail fees to send and receive documents. Overall, Summit Capital Partners was facing a costly and inefficient onboarding process that was hindering their growth potential.

The Approach

Golden Door Asset collaborated with David Park and his team to design and implement a fully digitized client onboarding workflow. The approach focused on three key areas:

1. Digital Forms and Electronic Signatures: The first step was to replace all paper-based forms with electronic versions. Golden Door Asset worked with Summit Capital Partners to convert their existing forms into interactive digital forms, ensuring compliance with all regulatory requirements. DocuSign was integrated into the workflow to enable clients to securely sign documents electronically. This eliminated the need for printing, scanning, and mailing physical documents.

2. Automated Data Validation and KYC/AML Compliance: To streamline data verification and ensure compliance, Golden Door Asset integrated automated data validation and KYC/AML checks into the onboarding process. Plaid was used to securely verify client bank account information, eliminating the need for manual verification and reducing the risk of errors. The system also automatically screened clients against global sanctions lists and performed other KYC/AML checks, ensuring compliance with regulatory requirements.

3. Custom Onboarding Portal: To provide a seamless and user-friendly experience for both clients and advisors, Golden Door Asset built a custom onboarding portal using React. The portal provided a centralized location for clients to complete their onboarding tasks, track their progress, and communicate with their advisors. Advisors could use the portal to manage the onboarding process, monitor client progress, and access all relevant documents and information. The portal included role-based access, so that junior employees did not have access to sensitive data unnecessarily. A dynamic questionnaire was implemented, presenting questions based on previous responses, reducing unnecessary steps. This approach drastically simplified the process for all parties.

The team implemented A/B testing to optimize the layout and user interface of the onboarding portal, ensuring a high completion rate and minimal client frustration.

Technical Implementation

The technical implementation involved a combination of off-the-shelf tools and custom-built components.

• Electronic Signatures: DocuSign was selected as the electronic signature provider due to its robust security features, compliance certifications, and ease of integration. Golden Door Asset utilized the DocuSign API to seamlessly embed the signing process into the onboarding portal. The implementation involved creating custom templates for each type of document, pre-populating fields with client data, and configuring signature workflows.

• Bank Account Verification: Plaid was integrated to provide secure and automated bank account verification. Plaid's API allows clients to securely connect their bank accounts to the onboarding portal, enabling Summit Capital Partners to verify account ownership and routing information. This eliminated the need for clients to manually provide bank statements or voided checks. The integration used Plaid's Auth and Identity products.

• Custom Onboarding Portal: A custom onboarding portal was developed using React, a popular JavaScript library for building user interfaces. The portal was designed to be responsive and accessible on all devices. The portal was built on top of a secure cloud infrastructure to ensure data security and availability. The backend was built using Node.js and a PostgreSQL database. The portal was integrated with Summit Capital Partners' existing CRM system to ensure seamless data flow.

• KYC/AML Compliance: Integration with a third-party KYC/AML provider, such as LexisNexis Risk Solutions, was achieved via API. The API enabled automated screening of clients against sanctions lists, politically exposed persons (PEP) lists, and adverse media databases. The system automatically flagged potential risks and generated alerts for compliance officers. A risk scoring system was implemented to categorize clients based on their risk profile, allowing for more targeted due diligence efforts.

• Data Encryption: All sensitive data was encrypted both in transit and at rest using AES-256 encryption. Regular security audits were conducted to ensure the ongoing security of the system.

The team leveraged infrastructure-as-code to deploy the solution in a repeatable and automated way. Unit tests and integration tests were implemented to ensure the quality and reliability of the code.

The team followed the NIST Cybersecurity Framework throughout the software development lifecycle.

Results & ROI

The implementation of the digital onboarding workflow yielded significant results for Summit Capital Partners.

• Reduced Onboarding Time: The average onboarding time decreased from 10 business days to 6 business days, representing a 40% reduction. This faster onboarding process allowed Summit Capital Partners to generate revenue more quickly. With each client having an average investment of $250,000, the accelerated onboarding translated to an estimated $1,650 increase in realized revenue per client during their first year (calculated from $6.85 lost potential revenue per day of delay).

• Improved Client Satisfaction: Client satisfaction scores increased by 25%, as measured by post-onboarding surveys. Clients praised the ease of use, convenience, and speed of the digital onboarding process. The average onboarding satisfaction score rose from 3.5 out of 5 to 4.4 out of 5.

• Increased Advisor Productivity: Advisors spent significantly less time on administrative tasks, freeing them up to focus on client relationships and investment strategies. The team estimated that advisors reclaimed an average of 5 hours per week, per advisor, that was previously spent on onboarding tasks.

• Cost Savings: The elimination of paper-based forms and manual processes resulted in significant cost savings. Express mailing costs were reduced by 90%, saving the company approximately $1,350 per month. Reduced error rates and improved compliance also resulted in indirect cost savings by minimizing the risk of fines and penalties. The estimated annual cost savings exceeded $25,000.

• Enhanced Compliance: The automated KYC/AML checks and data validation processes significantly improved compliance and reduced the risk of errors. The system automatically generated audit trails, making it easier to demonstrate compliance to regulators.

Key Takeaways

1. Prioritize Client Experience: A streamlined and efficient onboarding process significantly improves the client experience and fosters stronger client relationships.
2. Embrace Automation: Automate repetitive tasks to free up advisor time and reduce the risk of errors.
3. Integrate Technology: Integrate best-in-class technology solutions to create a seamless and efficient onboarding workflow.
4. Focus on Compliance: Ensure that your onboarding process is fully compliant with all regulatory requirements.
5. Measure and Optimize: Continuously monitor your onboarding metrics and make adjustments as needed to optimize the process.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate tasks, personalize client interactions, and make data-driven investment decisions. Visit our tools to see how we can help your practice.