Wealth management firms that lack control of client onboarding processes risk increased client attrition, missed growth opportunities, and regulatory peril.
Boston, July 7, 2011 – A new report from Aite Group examines the current state of U.S. wealth management firms’ onboarding processes. Based on an Aite Group survey of 99 U.S. wealth management home offices, conducted in early 2011, the report also discusses the path to implementing a mature onboarding process.
More than 70% of wealth management firms’ home offices view client onboarding as either a back-office function that needs to be cost-contained or a front-office automation tool; only 30% view client onboarding as a competitive differentiator. As such, firms are missing opportunities by limiting the scope of onboarding improvement projects to focus solely on improving automation at the account opening stage. Aite Group urges firms to view the onboarding process as an opportunity to deliver a differentiated experience to new clients.
“Delivering a high level of service to clients is particularly important during the new-client onboarding stage,” says Sophie Schmitt, senior analyst with Aite Group and author of the report. “This is when clients are forming their first impressions of the firm and have momentum to make changes in their financial lives.”
The report also discusses the path that firms should take to implement a mature onboarding process, characterized as “intelligent and responsive.” Firms operating at this level of process maturity are able to leverage process and client information to react to operational errors and relationship deepening opportunities as they occur at each process step. The Aite Group survey shows that firms having reached this stage benefit from lower account-opening cycle times compared with firms with low levels of process automation. These firms are also more focused on deepening client relationships and growing revenue during onboarding compared with firms operating at lower levels of process automation.
This 34-page Impact Report contains 28 figures. Clients of Aite Group's Wealth Management service can download the report.