Here we present reflections from the recently issued WealthBriefing research report on onboarding - produced in conjunction with Appway, SIX Financial Information and KPMG.

Top of the “to do” list
Many of the executives we spoke to, both in producing the report and during the roadshow events, shared the view that client onboarding is really the last piece of the puzzle when it comes to what we might call the digitisation of wealth management. Client onboarding is a lower volume process than others and it seems to have been the case that in the past management teams saw better candidates for automation and straight-through processing elsewhere in their businesses. While there was lower-hanging fruit, and a less pressing need to make enhancements, onboarding just wasn’t a priority for investment, it seems.

Attitudes appear to be changing quite rapidly now, however. While enhancing onboarding still seems to be very much on the “to do list” of the industry generally, during the roadshow we encountered executives from firms in the UK, the US and in Switzerland who have earmarked serious budgets for investment into onboarding. Indeed, we heard that a number of firms – some top five international names and other smaller boutiques – had already ploughed very significant resources into completely revamping their onboarding processes.

Digging deeper into the business case arguments which had got each of these institutions over the line revealed an interesting picture. While risk mitigation and cost control were, of course, usually mentioned in the first breath, the potential for enhanced onboarding to act as a differentiator was never far behind in these conversations. This recognition that wealth managers can stand out from their peers by developing truly modern onboarding processes - and tackling common pain-points for clients head-on – marks a real sea-change in attitudes, we believe.

Potential to differentiate
Even quite recently, onboarding was little appreciated as a front-office differentiator. In a 2011 study, Aite Group found that only around a quarter of US wealth managers regarded onboarding as a competitive differentiator, with the vast majority instead seeing it as a back-office function which needs to be cost-contained. While cost control is still clearly a primary motivator to put more automation and integration in place, the picture revealed by our research efforts suggests attitudes are shifting towards the “softer” side of onboarding and how it really can create “wow” moments for clients.

While carrying out primary research for our report, and throughout the roadshow, we asked a wide variety of senior executives what they would mostly be looking to achieve through enhancing their onboarding systems and processes. Cutting costs, reducing the number of staff involved, taking on assets faster and being able to adapt to new regulations more quickly were all there as options and figured highly in the debates. Yet, by a quite a wide margin, the most popular option was boosting referrals by providing a better client experience – and it is easy to see why from the survey results.

Some 54 per cent of the participants in our study believe the extended questioning and evidencing necessary today has negatively impacted the client experience during onboarding; a similar proportion believe the additional regulations which have come in over the past five years have significantly slowed conversion times. Tackling a process which is slow and entails increasing amounts of “back and forth” between client and institution, seems to be an ideal way for wealth manager to showcase their commitment to an excellent client experience - and to win those all-important referrals by making clients feel sure their friend or colleague would have a great first experience of the institution too.

In the past, the business case for improving onboarding processes and systems may have been somewhat obscure. Now that wealth managers are simultaneously chasing the highest standards of risk management, operational efficiency and client service, we see the argument for improving onboarding becoming ever stronger for all manner of firms. The executives who were able to tell WealthBriefing about their own firms’ onboarding overhauls all had powerful statistics around cost and time savings at hand. Most striking, however, was the sense that improving onboarding systems and processes had driven through all manner of other positive changes, from fostering greater collaboration between RMs and compliance through to forcing firms to rethink their use of client data. It would seem that an onboarding overhaul is a real opportunity for wealth managers to get their houses in order and tackle several weak points at once.