Streamlined New Client Onboarding: 40% Faster Process

Streamlined New Client Onboarding: 40% Faster Process

Executive Summary

Golden Door Asset partnered with a leading Registered Investment Advisor (RIA) facing significant inefficiencies in their manual, paper-based client onboarding process. By digitizing and automating the workflow, implementing electronic forms, and integrating advanced identity verification tools, we reduced onboarding time by 40%. This resulted in a 20% increase in client satisfaction and a 10% boost in new client acquisition, demonstrating the power of streamlined compliance and enhanced client experience.

The Challenge

Our client, a growing RIA managing over $500 million in assets under management (AUM), was struggling with a time-consuming and error-prone manual client onboarding process. The reliance on paper forms, manual data entry, and physical document verification created several critical pain points:

• Lengthy Onboarding Times: The average time to onboard a new client was 7 business days. This extended timeframe frustrated prospective clients, leading to potential attrition and delayed revenue generation. In today's competitive landscape, clients expect immediate gratification and seamless digital experiences. Each week spent waiting meant lost opportunities to actively manage client portfolios and generate returns.
• High Error Rates: Manual data entry inevitably led to errors, requiring significant time and resources to correct. Estimates revealed that 15% of new client applications contained errors, requiring an average of 2 hours per application to resolve. This translates to a direct labor cost of $30 per error, assuming an average hourly rate of $150 for support staff.
• Compliance Risks: Maintaining physical records created security risks and made it challenging to comply with regulatory requirements such as KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations. The risk of non-compliance could result in hefty fines, reputational damage, and potential legal action. One instance of incomplete KYC documentation cost the firm $5,000 in legal fees to rectify.
• Poor Client Experience: The cumbersome onboarding process created a negative first impression, potentially impacting long-term client relationships. New clients were often overwhelmed by the sheer volume of paperwork and the lack of transparency in the process. This contributed to a lower Net Promoter Score (NPS) among newly onboarded clients. A survey revealed that 60% of new clients rated the onboarding process as "average" or "below average."
• Inefficient Use of Staff Time: Financial advisors and support staff spent a significant portion of their time on administrative tasks related to onboarding, diverting their attention from more value-added activities like financial planning and client relationship management. Advisors were spending an estimated 5 hours per week, per advisor, on onboarding tasks, totaling a lost opportunity cost of approximately $12,000 annually per advisor based on billing rates.

These challenges collectively hindered the RIA's ability to scale its business, deliver exceptional client service, and maintain a competitive edge. The manual process was a significant bottleneck, preventing the firm from onboarding more clients and maximizing revenue potential.

The Approach

Golden Door Asset adopted a comprehensive, strategic approach to address the client's onboarding challenges:

1. Process Analysis & Mapping: We began by conducting a thorough analysis of the existing client onboarding process, mapping out each step, identifying bottlenecks, and quantifying the time and resources involved. This involved shadowing advisors, interviewing support staff, and reviewing existing documentation. The analysis revealed that approximately 70% of the onboarding process was manual.
2. Digitization & Automation: Our primary focus was to digitize all paper-based forms and automate key workflows. We implemented a secure client portal where clients could complete and sign forms electronically. Automated workflows were designed to route applications to the appropriate personnel for review and approval.
3. Integration with Existing Systems: We seamlessly integrated the new onboarding system with the client's existing CRM (Salesforce) and compliance systems. This eliminated the need for manual data entry and ensured that all client information was synchronized across platforms. The integration allowed for automated data population, reducing errors and saving time.
4. Identity Verification & Compliance: We integrated advanced identity verification tools to ensure compliance with KYC and AML regulations. These tools automatically verified client identities, screened for potential risks, and generated audit trails. This helped to reduce the risk of fraud and compliance violations.
5. Client Portal Design: We designed a user-friendly client portal that provided clients with a clear and transparent view of the onboarding process. The portal allowed clients to track the status of their applications, upload documents securely, and communicate with their financial advisors. We ensured the portal was fully responsive and accessible on all devices.
6. Security & Data Privacy: Security was a paramount concern. We implemented robust security measures to protect client data, including encryption, multi-factor authentication, and regular security audits. We ensured compliance with all relevant data privacy regulations, such as GDPR and CCPA.
7. Training & Support: We provided comprehensive training and ongoing support to the client's staff to ensure they were proficient in using the new onboarding system. This included online training modules, live webinars, and dedicated support channels.

Our strategic decision-making framework prioritized solutions that were scalable, secure, and client-centric. We focused on streamlining the process, reducing errors, and enhancing the overall client experience.

Technical Implementation

The technical implementation involved a combination of software integrations, custom development, and security protocols:

• Secure Client Portal: We built a secure client portal using a modern web development framework (React) and a secure backend infrastructure (AWS). The portal featured:

  • Electronic Forms: Dynamic forms generated using JSON schema and rendered in the portal using React JSON Schema Form, allowing for conditional logic and data validation.
  • Electronic Signatures: Integration with DocuSign API for secure and legally binding electronic signatures. The DocuSign integration ensures compliance with ESIGN and UETA acts.
  • Document Upload: Secure document upload functionality using AWS S3 for storage and retrieval. Documents were encrypted both in transit and at rest.
  • Two-Factor Authentication: Implementation of two-factor authentication (2FA) using Google Authenticator or SMS for enhanced security.

• CRM Integration (Salesforce): We integrated the client portal with Salesforce using the Salesforce REST API. This allowed for:

  • Automated Data Population: Data entered by clients in the portal was automatically populated into relevant fields in Salesforce, eliminating manual data entry.
  • Workflow Automation: Integration with Salesforce workflows to trigger automated tasks, such as sending follow-up emails or creating tasks for advisors.
  • Real-Time Reporting: Real-time reporting on onboarding progress through Salesforce dashboards, providing visibility into key metrics.

• Compliance System Integration: Integration with the client's existing compliance system for automated KYC and AML checks. This involved:

  • Data Mapping: Mapping of data fields between the client portal and the compliance system to ensure accurate data transfer.
  • API Integration: Utilizing the compliance system's API to trigger automated checks and receive alerts for potential compliance issues.
  • Audit Trails: Automated generation of audit trails for all onboarding activities, providing a comprehensive record of compliance efforts.

• Identity Verification: Integration with a third-party identity verification service (e.g., Jumio or Onfido) to automatically verify client identities. This involved:

  • Document Scanning: Automated scanning and verification of government-issued identification documents.
  • Facial Recognition: Facial recognition technology to match client photos with identification documents.
  • Database Screening: Screening of client information against sanctions lists and watchlists to identify potential risks.

• Security Measures: Implemented the following security measures:

  • Encryption: End-to-end encryption of data using TLS 1.3 for data in transit and AES-256 encryption for data at rest.
  • Vulnerability Scanning: Regular vulnerability scanning and penetration testing to identify and address potential security vulnerabilities.
  • Access Control: Role-based access control to restrict access to sensitive data based on user roles.
  • Data Masking: Data masking to protect sensitive data from unauthorized access.

The entire system was designed to be scalable, secure, and compliant with relevant regulations. We utilized industry best practices for software development and security to ensure the integrity and confidentiality of client data.

Results & ROI

The implementation of the digitized onboarding system yielded significant results and a compelling return on investment:

• Reduced Onboarding Time by 40%: The average time to onboard a new client decreased from 7 business days to 4.2 business days. This represents a significant efficiency gain, allowing the RIA to onboard more clients in less time.
• Improved Client Satisfaction Scores by 20%: Client satisfaction scores, as measured by Net Promoter Score (NPS), increased by 20% among newly onboarded clients. This reflects the improved client experience and the ease of use of the new onboarding system. The improved NPS translated to increased referrals and positive word-of-mouth.
• Increased New Client Acquisition by 10%: The streamlined onboarding process contributed to a 10% increase in new client acquisition. This was attributed to the faster onboarding times, the improved client experience, and the ability of advisors to focus on business development activities. This resulted in an additional $50 million in AUM within the first year of implementation.
• Reduced Error Rates by 80%: The error rate in new client applications decreased from 15% to 3%. This reduction in errors significantly reduced the time and resources required to correct errors, saving the firm an estimated $2,400 annually in support staff time. (Calculation: (15% - 3%) * Number of new clients * 2 hours/error * $150/hour)
• Reduced Compliance Risk: The automated KYC and AML checks significantly reduced the risk of compliance violations. The audit trails provided a comprehensive record of compliance efforts, making it easier to demonstrate compliance to regulators. The firm avoided potential fines and reputational damage.
• Increased Advisor Productivity: Advisors were able to spend more time on value-added activities, such as financial planning and client relationship management. The reduction in administrative tasks freed up approximately 5 hours per week per advisor. This increased productivity resulted in higher revenue generation and improved client service.

These results demonstrate the significant benefits of digitizing and automating the client onboarding process. The faster onboarding times, improved client experience, and reduced compliance risk all contributed to a strong return on investment.

Key Takeaways

1. Prioritize Client Experience: A seamless and efficient onboarding process is crucial for creating a positive first impression and building long-term client relationships.
2. Embrace Automation: Automation can significantly reduce manual tasks, errors, and onboarding times, freeing up staff to focus on more strategic activities.
3. Integrate Systems: Integrating your onboarding system with your CRM and compliance systems is essential for ensuring data accuracy and streamlining workflows.
4. Invest in Security: Security should be a paramount concern when digitizing client data. Implement robust security measures to protect client information and comply with data privacy regulations.
5. Measure and Track: Continuously measure and track key metrics to monitor the performance of your onboarding process and identify areas for improvement.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate compliance, personalize client communications, and identify new growth opportunities. Visit our tools to see how we can help your practice.