Client On Boarding as a Competitive Advantage

The wealth management industry has lagged in dedicating focused resources on developing an efficient client on-boarding process to maximize the relationship established during the sales process.

In a 2011 study of 99 wealth management firms, Aite Group stated that ”More than 70% of the firms’ viewed client on boarding as either a back-office function that needs to be cost-contained or a front-office automation tool.  Only 30% viewed client on boarding as a competitive differentiator.”  An overview of the report can be found at http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=812.

One company stands out as understanding the importance of managing the client actively during the first several months as a new client.  Credit Suisse Investment Banking identifies an on boarding team to be the first point of contact for new clients that join their Prime Services platform.  The team is responsible for all functions of the on on boarding process including client set-up, client review, liaison to bank product specialists, credit and legal process, integrating technology and client systems and weekly client communications. They even highlight the process on their website and clearly see this as a competitive advantage. https://www.credit-suisse.com/investment_banking/equities/en/client_onboarding.jsp

The above link shares the service on their website and introduces a next level of client service to the high net worth client.

Most wealth firms spend a great deal of time and resources on identifying prospects, managing the sales process and bringing a new client into the firm.  Once they have signed on they are often turned over to junior staff and receive less attention as their sales teams move on to the next new business effort.  The on boarding process is often automated and becomes a process void of human contact. Yet this short-sided strategy overlooks the fact that in most cases the majority of new client assets move during the first 6-8 months as a new client account. What happens to that client during this time can mean the difference between a successful long term client relationship and a client who holds only a small relationship with the firm.  This window of opportunity to work with a client requires a well thought out and executed strategy to achieve long term success.

 When developing an on-boarding strategy the primary goals include:

-          Enhancing the new client experience

-          Understanding the longer term needs and expectations of the client

-          Broadening the client relationship to provider of choice status

-          Deepening the client relationship

-          Providing opportunity for increased client referrals

-          Ensuring that client retention is based on an efficient and client focused on-boarding experience

Although technology has a strong component in the on boarding period, too many firms have automated the process and lost the personal interactions that have the strongest impact on the success of the client experience.  In developing a successful business model for client on boarding it is critical to keep in mind a few areas that must be addressed:

-          A dedicated team that will deliver the on boarding strategy

-          A process to include technological efficiencies along with personal interaction

-          A defined strategy of steps that is carried out consistently to provide a standardized customer experience for each new client.

-          Measurements to determine the success of the on boarding strategy.

-          Client feedback to refine and enhance the process as client priorities change over time.

-          Accountability for the activities involved in the on-boarding process.

-          On boarding into ongoing client management strategy.

-          Client experience strategy using in-person, mobile and online strategies.

Today’s competitive environment has mandated that wealth management firms look closely at their sales, on boarding and client management process to provide a client experience that is unique and clearly  becomes the firm’s competitive advantage for future growth.