Harrington Legacy Advisors Achieves 95% Client Retention Via Streamlined Onboarding

Harrington Legacy Advisors Achieves 95% Client Retention Via Streamlined Onboarding

Executive Summary

Harrington Legacy Advisors, a growing RIA firm, struggled with inconsistent client onboarding, resulting in client frustration and a first-year attrition rate of 20%. To address this, Golden Door Asset collaborated with Harrington to design and implement a structured 90-day onboarding program focused on clear communication, personalized portfolio reviews, and proactive expectation management. This revamped process led to a 15% increase in client retention within the first year, translating to $67.5 million in retained assets under management (AUM).

The Challenge

Harrington Legacy Advisors recognized a significant leak in their growth pipeline: client attrition during the crucial first year. While their long-term client relationships were strong, the initial onboarding experience proved inconsistent and often overwhelming for new clients. This inconsistency manifested in several key areas:

• Lack of Structured Communication: New clients reported feeling unclear about the onboarding process itself. Communication was ad-hoc, leading to confusion about required paperwork, investment timelines, and the advisor's role. For instance, one new client, a retiring engineer named Robert, commented, "I felt lost for the first few weeks. I wasn't sure what to expect next or who to contact with my questions." This sentiment was echoed across client surveys.

• Unrealistic Expectations: Advisors sometimes overstated potential returns or glossed over market risks during initial consultations, setting unrealistic expectations that were difficult to meet in the subsequent months. A client with a $500,000 portfolio, lured by promises of "market-beating" returns, became disillusioned when their portfolio only grew by 6% in the first six months, despite overall market gains. This mismatch between expectation and reality led to distrust and increased the likelihood of churn.

• Inefficient Paperwork Processing: The onboarding process involved significant amounts of paperwork, often requiring clients to print, sign, and mail documents. This process was time-consuming and frustrating, particularly for younger, digitally savvy clients. The average time to complete all onboarding paperwork was 3 weeks, a period where clients felt detached and uncertain about the status of their accounts.

• Reactive Portfolio Reviews: Portfolio reviews were conducted on an ad-hoc basis, often only triggered by client inquiries or market downturns. This reactive approach failed to proactively address client anxieties and build trust. A client with a $750,000 retirement account expressed concern that their portfolio allocation wasn't aligned with their risk tolerance after a minor market correction, highlighting the need for more frequent and personalized communication.

These challenges resulted in a client attrition rate of 20% within the first year. Considering Harrington Legacy Advisors' average client portfolio size of $500,000, this attrition represented a significant loss of potential AUM and revenue. With 75 clients churning annually, the firm was effectively losing $37.5 million in AUM each year.

The Approach

To address these challenges, Golden Door Asset collaborated with Harrington Legacy Advisors to develop a structured 90-day onboarding program designed to create a seamless and engaging experience for new clients. The approach was built on four key pillars:

1. Structured 90-Day Onboarding Plan: We created a detailed roadmap outlining key milestones, communication touchpoints, and required actions for the first 90 days. This plan was designed to provide clients with a clear understanding of the onboarding process and what to expect at each stage. The plan included:

   • Week 1: Welcome and Introduction: A personalized welcome email and phone call from the advisor, outlining the onboarding process and setting expectations. Introduction to the client portal.
   • Week 2: Data Gathering and Risk Assessment: Collection of client financial information, risk tolerance questionnaires, and investment goals. Use of a dynamic risk assessment tool to objectively determine the client's risk profile.
   • Week 3: Investment Plan Development: Development of a personalized investment plan based on the client's financial goals, risk tolerance, and time horizon. A detailed presentation of the proposed portfolio allocation, including rationale and expected performance.
   • Week 4: Plan Review and Approval: A comprehensive review of the investment plan with the client, addressing any questions or concerns. Secure electronic signature of the investment policy statement.
   • Month 2: Portfolio Implementation and Monitoring: Implementation of the investment plan, including account setup and asset allocation. Regular portfolio monitoring and performance reporting.
   • Month 3: Initial Portfolio Review and Feedback: A comprehensive portfolio review with the client, discussing performance, market conditions, and any necessary adjustments to the investment plan. Solicitation of client feedback on the onboarding experience.

2. Personalized Communication Strategy: We implemented a multi-channel communication strategy to ensure clients were consistently informed and engaged throughout the onboarding process. This strategy included:

   • Personalized Emails: Automated emails triggered by specific milestones in the onboarding process, providing clients with relevant information and reminders.
   • Phone Calls: Regular phone calls from the advisor to check in with clients, answer questions, and build rapport.
   • Video Updates: Short, informative videos explaining complex financial concepts and providing market updates.
   • Client Portal: A secure online portal where clients could access their portfolio information, track progress, and communicate with their advisor.

3. Proactive Expectation Management: We emphasized the importance of setting realistic expectations from the outset. Advisors were trained to clearly communicate market risks, potential returns, and the limitations of investment strategies. This involved:

   • Realistic Return Projections: Presenting a range of potential return scenarios based on historical data and market forecasts.
   • Risk Disclosure: Clearly explaining the risks associated with different asset classes and investment strategies.
   • Transparency: Being upfront about fees and expenses.

4. Client Feedback and Continuous Improvement: We established a system for collecting client feedback throughout the onboarding process. This feedback was used to identify areas for improvement and ensure the program remained effective. This involved:

   • Post-Onboarding Surveys: Sending out surveys to new clients to gather feedback on their onboarding experience.
   • Advisor Feedback: Regularly soliciting feedback from advisors on the effectiveness of the onboarding program.
   • Data Analysis: Analyzing data on client engagement, satisfaction, and attrition to identify areas for improvement.

Technical Implementation

The success of the streamlined onboarding program relied on the seamless integration of technology and processes. The core technical components included:

• Wealthbox CRM: Wealthbox was used as the central hub for managing client data, automating tasks, and tracking communication. We configured Wealthbox to trigger automated emails based on specific milestones in the onboarding process. For example, after a client completed the risk assessment questionnaire, an email was automatically sent scheduling a portfolio review. Task automation reduced the administrative burden on advisors, freeing up more time for client interaction.

• DocuSign Integration: DocuSign was integrated to streamline the document signing process. Clients could securely sign documents electronically from anywhere, reducing the time and effort required to complete the onboarding paperwork. This eliminated the need for printing, scanning, and mailing documents, significantly improving the client experience. The time to complete all required paperwork decreased from 3 weeks to under 3 days.

• Portfolio Management System (PMS): Harrington used a third-party PMS, which was integrated with Wealthbox to provide advisors with a comprehensive view of client portfolios. The PMS provided real-time data on portfolio performance, asset allocation, and risk metrics.

• Risk Assessment Tool: A dynamic risk assessment tool was implemented to objectively determine each client's risk profile. The tool used a series of questions to assess the client's risk tolerance, investment goals, and time horizon. The results of the risk assessment were used to develop a personalized investment plan that was aligned with the client's individual needs.

The calculation for AUM retention involved tracking the AUM of new clients after one year. The formula used was:

Retained AUM = (Total Initial AUM of Clients Onboarded) * (1 - Attrition Rate)

In Harrington’s case: ($450,000,000 initial AUM from new clients) * (1 - 0.05) = $427,500,000 retained AUM

Previously, the retained AUM using the old 20% churn rate would have only been $360,000,000: ($450,000,000) * (1-0.20) = $360,000,000. The difference represents $67.5M in retained AUM directly attributable to the new onboarding process ($427,500,000 - $360,000,000 = $67,500,000)

Results & ROI

The implementation of the streamlined onboarding program yielded significant results for Harrington Legacy Advisors:

• Client Retention Increased by 15%: Within one year, client retention increased from 80% to 95%. This represents a substantial improvement in client satisfaction and loyalty.

• $67.5 Million in Retained AUM: The increased client retention resulted in $67.5 million in retained AUM, significantly boosting the firm's revenue and profitability.

• Improved Client Satisfaction: Client satisfaction scores, measured through post-onboarding surveys, increased by 25%. Clients reported feeling more informed, engaged, and confident in their financial plan. The average rating jumped from 3.5 stars (out of 5) to 4.4 stars.

• Reduced Administrative Burden: Automation of tasks and streamlining of processes reduced the administrative burden on advisors, freeing up more time for client interaction. Advisors reported spending 20% less time on administrative tasks related to onboarding.

• Faster Onboarding Time: The average time to complete the onboarding process decreased from 3 weeks to under 1 week.

Specifically, the firm saw a dramatic increase in the number of clients completing their onboarding within the 90-day window. Previously, only 60% of clients completed onboarding within 90 days. Following implementation of the program, 92% of clients completed the full onboarding process within the allotted timeframe.

Key Takeaways

• Structure and Consistency are Key: A structured onboarding program with clear milestones and consistent communication is essential for creating a positive client experience.
• Personalization Matters: Tailoring the onboarding experience to each client's individual needs and preferences can significantly improve client satisfaction.
• Proactive Communication Builds Trust: Communicating proactively with clients, addressing their concerns, and setting realistic expectations can foster trust and loyalty.
• Technology Can Streamline Processes: Utilizing technology to automate tasks, streamline paperwork, and improve communication can significantly enhance the efficiency and effectiveness of the onboarding process.
• Feedback Drives Improvement: Continuously collecting and analyzing client feedback is crucial for identifying areas for improvement and ensuring the onboarding program remains effective.

About Golden Door Asset

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