A seamless onboarding process is critical in driving a positive first impression and delighting a customer through the first engagement.

Advice businesses are becoming leaner with a sharper focus on systemised approach to client engagements. On-boarding sets the foundation for these relationships and client acquisition.  Getting the onboarding process right is crucial to future profitability.

Investment Trends regularly assesses the key themes in the adviser market, and client retention is  consistently hot topic in the sector. High compliance costs have also impacted profitably, says Investment Trends Head of Research Irene Guiamatsia. Her colleague and senior analyst Bailey Hao also notes that this challenge around profitability has been amplified as advisers move away from the big businesses such as wealth management and bank aligned firms to become self-licenced.

Furthermore, a recent whitepaper from AUSIEX, Australia’s trading transformation A comparative analysis of how market segments are approaching today’s market, and what it means for advisers and investors, revealed an influx of new investors who were eager to take advantage of market movements. Better onboarding will ensure investors get to market faster.

Advisers can take some steps to improve the client onboarding experience.

The first point of contact is crucial to getting the onboarding process right from the start, and that even includes the company website. Based on Investment Trends’ research, Guiamatsia is finding a level of advocacy in the market where retail investors talk to their friends and family about the technology innovations they have experienced when seeking or accessing advice.

While that is predominantly around mobile apps, the research highlights the growing need to make client engagement easier. It also comes down to simplicity and consistency of language, according to Hao.

“There are different levels of understanding when it comes to financial literacy. People need to be guided. Even providing information to support or encourage the onboarding process, such as information on how to invest in shares, is a valuable initiative,” Hao says.

“Transparent and easy-to-understand language will give clients greater confidence to work with you.”  

Harness technologies

Hao speaks of a raft of innovations that advisers can use to make the onboarding process smoother. Advisers can improve the online application process by using ‘internal validation’ processes, where forms are pre-populated or auto-filled with a person’s address.

Flexibility, however, is needed in this process. Hao is seeing approaches where clients have the choice to partly complete online forms digitally and then speak to the adviser in finalising their application. Digital ID verifications are also becoming increasingly popular, as well as e-signatures.

LAB Group’s Chief Technology Officer Lyndon Webster sees scope for the role of innovation in driving efficiencies in the onboarding process and speedily delivering the type of services customers expect.

“This will be particularly important as the speed of money transfer increases through innovations like the New Payments Platform and faster settlement of share transactions that further highlight the friction and inefficiencies that exist in traditional onboarding processes,” Webster says.

Great expectations

Citing a recent personal experience with a large online retailer, Webster ordered a product on Sunday evening, and it was delivered on the next day - a public holiday. He believes this level of efficiency is driving heightened consumer expectations in the financial services sector.

“In most onboarding processes, it can take two to three weeks to get an account opened, but once it is opened, I can transfer my money into that account instantly.  Clearly, one half of the transaction is not keeping pace with the level of innovation in the other half of the transaction,” he says.

Cutting the costs

“And even then, during the onboarding process, a raft of complex and sensitive information is required such as passport or driver’s licence for identification purposes, which leads to high abandonment rates and internal rework and verification that drive up internal costs.”

Lab Group has developed a range of software products that enable regulated businesses to efficiently onboard their customers while satisfying the myriad of rules and regulations inherent in the process.  But for Webster, this also goes beyond compliance.

“Businesses need to convert applications into accounts as quickly as possible. This is difficult given the regulatory checks that are now needed but tools and systems are available to expedite that process. Faster onboarding allows clients to transact faster, which speeds up return on investment.”

Webster gave an example where the average cost to onboard a client through to their first trade can be as high as $1,200 taking into account marketing costs and abandonment throughout the process. 

“There is a big opportunity to bring that cost down through optimisation of the onboarding process and more automation to speed up the conversion of the initial application into an account so that clients can fund their new account and start transacting as quickly as possible,” Webster says.

“The fact that consumer expectations are aligned with the obvious business benefits that come from faster and more efficient customer onboarding makes this a compelling business case”.

The omni-channel remains key.  

The health pandemic has certainly driven people to embrace digital interactions, a shift that is also confirmed by Investment Trends.  However, it is still important to provide clients with a choice in how they want to communicate when onboarding rather than just adopting a one-size-fits-all approach.

It should also be based on their preferences. Some clients would prefer to interact purely through digital channels when onboarding, while other clients would like the option of a phone conversation to iron out any issues. The key here is providing that choice.

Adviser provider platforms, websites and digital assets play a key role in delivering an intuitive self-service hub for their customers. Allowing quick, easy digital online processes drives ongoing engagement. The focus drives eas of use and aims to delight customers in their initial interactions and on-boarding, while support service like chat-bots, web chat and broader phone based service teams are available to provide value where a customer is either wishing to speak to someone.