usiness team in a meeting looking at a sheet of paper

Client onboarding is to advisory relationships what the first date is to personal relationships. It’s the client’s first real interaction with you and your firm, and it sets the tone for the relationship. If the first date isn’t good, there may not even be a relationship.

Despite the importance of this interaction, most players in our industry continue to have a cumbersome, disjointed, hard-to-imagine-it-exists-in-2023 client onboarding process.

Research from McKinsey indicates that in the U.S. 50% of high-net-worth and affluent clients say their primary wealth manager should improve digital capabilities across the board. I would expect this number to be even higher in Canada, as Canadian firms tend to lag the U.S. in digital offerings.

Forward-thinking firms recognize that a simple, digitally enabled, client-focused onboarding process can be a differentiator in a world where products and portfolios are increasingly indistinguishable.

Our clients want and expect modern and intuitive onboarding processes, so what’s stopping us? The return on investment (ROI) is hard to measure. That does not mean there isn’t a healthy ROI, but it’s often difficult to use existing metrics to justify redesigning the onboarding experience. Firms should consider the following ROI metrics and other factors.

ROI. Firms are identifying additional client satisfaction metrics to better measure the impact of client onboarding processes. They are also diving deeper into abandonment rates during the client onboarding process, and striving to better understand the reasons.

Another cost of outdated onboarding processes is that they’re prone to errors that often require manual intervention. This takes time and causes disruption, and is a cost to both the firm and advisor team. These costs should be readily measurable, and will support a business case for prioritizing improvements to the onboarding process.

Client experience. It’s hard to imagine being proud of an onboarding journey grounded in yesterday’s technology. It’s equally hard to imagine that clients will be delighted by it and make referrals to their friends.

Client expectations have been shaped by fantastic digital experiences in all parts of their lives. They hold our industry to those standards, and we haven’t met them.

Advisor experience. The future of advice involves providing hyper-personalized advice based on specific client goals and needs. The challenge is doing that at scale. It won’t be possible if processes like client onboarding take as much time and effort as they do today.

We must free advisors to provide the high-value services that clients increasingly demand, and eliminate or significantly reduce the tasks that take unnecessary time and require manual interventions.

We must also nimbly leverage data gathered through the onboarding process to offer relevant client insights.

End-to-end process. Even when firms send digital teams to review and improve their processes, they tend to focus on one or two steps, rather than review the end-to-end onboarding process.

While not every firm can overhaul its entire process at one time, an understanding of the end-to-end process is critical to make informed decisions about prioritization.

Co-design principles. While many firms are familiar with design thinking, the principles of co-design may be more powerful in developing streamlined, relevant and easy-to-use client onboarding processes. In addition to digital solutions teams, legal, compliance and risk teams are essential participants in the design process, as they help us understand the regulatory requirements. But as regulators have moved to principles-based requirements, there is more opportunity to innovate in meeting those requirements.

As a result, co-design principles would dictate that client and user experience teams should also be at the table as equal collaborators, to drive creative and user-friendly solutions.

Bringing the client and advisor perspective is also critical. Involving advisors and even clients in the co-design process to understand their needs and expectations would provide additional insights and help identify impactful technology improvements.

What advisors can do to improve onboarding

While the onboarding process is a problem for your clients, it is also a problem for you and your teams. It takes more time than it should and involves more apologizing to clients than it should. All in all, it costs you and your business time and money, as well as frequently straining client loyalty.

Identify onboarding as a priority. Make your voice heard. When you are asked what your firm should do to support your business and clients, tell them that the client onboarding experience needs time and attention and belongs on the priority list.

Don’t play the blame game. In the meantime, don’t blame the firm and its processes, or even the regulators that impose the requirements, when speaking with clients.

Instead, position the existing process as positively as you can. Explain that, while the process can be intimidating, the requirements are there to protect them, and (hopefully) that your firm is working on improving the process.

Be sure that you and your team understand existing processes as well as possible, because shortcuts are often available. Finding and utilizing them will save you money and your clients time.

Leverage the onboarding process to understand your clients. Finally, use the onboarding process, in whatever shape it’s in, to understand your clients. Any client in an advice relationship appreciates their advisor getting to know them — learning about their hopes and dreams, and understanding their problems and worries. That is the foundation to a trusting client relationship and a fundamental step to helping clients articulate and achieve their goals.

Susan Silma has a deep understanding of the client perspective informed by extensive client research, and supports advisors in meeting evolving client needs by incorporating technology and holistic advice.