How much digital onboarding do clients want?

Thomas Bosshard
  • Thomas Bosshard


  • Digitalization

Onboarding is one of the most crucial stages of the client lifecycle. It gives the advisor a unique opportunity to create a strong client relationship from the very beginning. It also defines the later stages of the client journey. Therefore, it is important to get it right from the start.

But onboarding can also be a lengthy experience. Setting up a new wealth management relationship means collecting lots of data, clarifying what clients want from their portfolio, analyzing how it fits in with their other assets and what their risk tolerances, expectations, needs, preferences and goals are. The regulatory spotlight on wealth management practices makes onboarding especially challenging in view of know-your-customer and anti-money-laundering regulations. This can involve extensive paperwork and repetitive procedures.

Furthermore, clients some in various shapes and sizes. Some know exactly what they want to do, others know next to nothing. Some want to get involved or become more educated on their journey, others delegate all portfolio decisions to their advisors.  Therefore, a one-size-fit-all approach is rarely leads to a profitable long-term relationship.

But what all clients want is the best value out of their investments, and client advisors should be able to articulate a compelling value proposition that is tied to client specifics. Without in-depth knowledge of their specific circumstances and objectives, this is next to impossible and may lead to the perception that the advisor is only pushing products. Personalized advice, on the other hand, reassures clients that the advisor has truly understood their situation and aspirations and inspires trust.

For all these reasons, advisors should have the best tools, support teams, products and processes at their disposal. Enter digitization. Many financial institutions are reimagining how to use technology to support onboarding.  Digitizing onboarding workflows promises to save time and cut operational costs for processing client data manually or coming up with recommendations while staying compliant. The question to consider is therefore which advisory processes can be automated without losing a client’s trust.

In recognition of the changing role of clients from passive to active players, the concept of value co-creation was coined and found its way into financial advisory processes. As opposed to traditional financial advisory settings, where the advisors hold the knowledge and clients rely on their advisors’ know-how to assist them in high-stake decisions, a value co-creation scenario would enable advisor and client to explore the same information during their discussions, e.g. visualized knowledge from investment research on mobile devices, thus giving the client more control and enabling collaborative decision-making. But often this information is still hard to understand, requires extensive explaining and thus may result in a perceived loss of control and ultimately trust.

A fully self-service onboarding process may be perceived as full control by client segments who are accustomed to interacting with their mobile devices and do not want to wait for office hours, returned calls or appointments. The success of roboadvisory platforms demonstrates that this flexibility is perceived as genuine added value. Trust is put in the sophistication of the algorithms behind the roboadvisor that may even make better decisions than a junior human advisor. Analytics can even help personalize a fully digital experience to a certain extent, for example by providing “people like you” examples to demonstrate what others have done with similar profiles and interests. Therefore, from a strategic point of view, it makes sense for wealth managers to introduce more of these roboadvisory capabilities for onboarding, so they can reach clients that have traditionally been out of their reach, e.g. millennials that are attuned to this type of self-service from other industries or are just starting out as new investors. They may be the high net-worth investors of the future.

Many consulting firms have published reports that suggest combining both worlds, digital and human, into a hybrid or “bionic” advisory model. Accenture, for example, established that 68 percent of Emerging Wealthy and High Net Worth investors already prefer hybrid models to a traditional advice model. However, for the onboarding process, this may shift in favor of human interaction according to Capgemini’s World Wealth Report 2017, which states that HNWIs prefer “wealth-manager-led” interaction at the initial stages of the client relationship and are more willing to adopt a hybrid model at later stages. Our conversations with numerous financial advisors point in the same direction. They show that the likelihood of a client fully delegating a profitable advisory mandate increases with face-to-face interaction as it is the only type of interaction that proves to clients that they can rely on a true understanding of their situation. Therefore, if combining both worlds is inevitable, then it should be at least at a balance that clients are looking for.

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