Wealth management firms have to let go of traditional ideas of when, where, and how to take on new clients
As fintech firms allow customers to create new accounts on micro-investment platforms, wealth management firms have to adapt by delivering their services in quick, inexpensive and easy ways. And that has to happen early — as soon as they onboard a client, in fact.
In a recent article for WealthManagement.com, Broadridge Financial Solutions President Michael Dignam outlined the different ways new-client onboarding has been redefined in the digital era. First, he pointed out, is the fact that firms have an opportunity to start developing relationships and trust even before someone becomes a client.
“Many firms still segment ‘leads,’ ‘prospects,’ and ‘clients.’ But the lines are getting blurry,” he said. He illustrated by pointing to the growing popularity of self-serve pre-client portals; interested leads get a sample of the client experience offered by a firm by getting limited access to core platform functionality. Through these pre-onboarding interactions, wealth managers can collect data at an early stage, identify follow-up opportunities, and gain advance insight into new clients’ interests and goals.
Citing a recent report titled Wealth and Asset Management 2022 by the Roubini ThoughtLab, he said the population of wealth-management firms offering digital onboarding is expected to increase from 43% today to 70% in 2022. The highest growth is expected from mobile-app-enabled, express account opening, which is expected to double by that time as nearly a quarter of the industry introduces new mobile apps.
“When new clients are ready to act, they should be able to scan and upload relevant documents with only their smartphone,” Dignam said. “The entire account opening process should be quick and painless. And paperless, too.”
With pre-onboarding platforms and mobile-enabled onboarding, he said, firms can take a huge step toward deep data integration. Referring again to the Roubini report, he noted that digital leaders are data- and analytics-driven. Ninety-four per cent of digital leaders reportedly use analytics on an enterprise-wide scale, while 65% of all firms cite becoming a data-driven organization as a top priority.
“To achieve these goals, client onboarding should be multi-channel,” Dignam said. “A client profile that is onboarded into one line of business should easily sync with data from another line of business, or even accounts outside the firm.”
Aside from making backend workflows smoother or easing the identification of cross-selling opportunities, he said it would spare customers from the trouble of providing the same information more than once. Information could be aggregated and updated in real time to create a holistic financial picture, he said, with permissions obtained securely through a smartphone thumbprint-scanning feature.
“In the new, customer-centric economy, relationships are for more fluid and freewheeling,” Dignam said. “Firms that thrive in this environment will be those who can onboard new clients faster and smoother, from anywhere.”