Relationship building: it starts with client onboarding

Any financial advisor can attest to the fact that slow and complex customer onboarding is a problem. For many advisors, the onboarding process means lots of paperwork, lots of worry about compliance, and is unnecessarily long and difficult.

Because of this, most advisors tend to view client onboarding as a hassle rather than an opportunity. In the wake of a focus on growth, client onboarding becomes an afterthought rather than a relationship-building opportunity. It can be tempting to turn to the next potential client rather than focus on creating a lasting impression with new clients.

First impressions count

The client onboarding process is the starting point for the entire business relationship.

While it may not seem worthwhile, it’s important to remember that first impressions are lasting, and they begin with the client onboarding process. Failing to take advantage of that first face-to-face interaction is a missed opportunity that can hurt the client relationship before it’s even had a chance to get started.

Client onboarding is also an essential opportunity for advisors to uncover client needs, right from the get-go. Understanding the unique challenges and demands of a new client lays the foundation for a continuing successful relationship down the line.

Take advantage of technology

Onboarding software can be used to automatically guide the account opening process and bring it online, while enabling your advisory workforce to go mobile. Taking advantage of available technology to streamline the process and go paperless means more opportunity and time to focus on the personalized side of client interaction.

The application of this technology makes it possible to meet clients anywhere and open accounts faster and more accurately than ever before. And with paperwork out of the way, there’s time for real conversations with clients. These conversations are key to uncovering the key cross sell and upsell opportunities that are so critical to address in the first 90 days of the relationship.

A personalized touch

A little bit of effort goes a long way in distinguishing yourself from competitors. To ensure every client feels valued, consider providing a personalized welcome package to demonstrate appreciation and understanding of the new clients’ business and establish a commitment to service.

Follow up an exceptional account opening experience with a series of personal touch points during the first year of the client lifecycle. Recent studies suggest that most clients prefer a scheduled meeting with their primary wealth management advisor at least quarterly. These check-ins are an opportunity to deepen relationships and help clients select products and services that address their changing needs. Leveraging wants and needs identified during onboarding can help guide these conversations.

Client onboarding forms the base for all future client interactions. Taking advantage of technology that can help simplify and expedite the onboarding process means even more time to focus on the personalized aspect of client interactions, ensuring you put your best foot forward from the very first interaction and build a relationship that will thrive for years to come.

Beyond the robo-advisor hype: the battle for the customer and how financial institutions are responding

Robo-advisors like Betterment and Wealthfront made waves within the financial community over the past few years with their automated portfolio rebalancing, modern user interfaces and lower management fees.

Then something interesting happened:

Big banks and large wealth management firms responded by offering their own robo-advisor technology to their clients or announced intentions to develop them.

In true start-up fashion, Betterment expanded its’ product base, offering its’ services to financial professionals. Vanguard and Charles Schwab responded by offering robo-advisory services to their network of investment professionals and were able to quickly capture more assets under management than Betterment and Wealthfront.


In Canada, we’re starting to see the same trends in robo-advisor adoption.

Companies like Wealthsimple and Nest Wealth built low-fee robo-advisor solutions and attracted interest from millennials. Interestingly, Wealthsimple followed in Betterment’s foot steps by first positioning as a direct-to-consumer robo-advisor and expanded its service offerings in recent months to financial professionals.

So Why the Big Interest in Offering Robo-Advisory Services?

Robo-Advisors are filling an Investment Advice Gap.

They offer web and mobile based platform to give clients easy access to a diversified investment portfolio. These services are being marketed as a cheaper and more accessible alternative to traditional financial advisors, based on the low investment minimums and lower fees (typically between 0.15% to 0.40% on total assets under management).

For millennial audiences, this type of technology makes sense because their investment goals are not-as-of-yet specific so it’s possible to offer them a One-size-fits-all solutions by varying the asset allocation percentage as a function of their risk profile.

The business model sounds attractive on the surface until you do some analysis:

According to Michael Wong from Morningstar, Robo-advisors need between $16 Billion and $40 Billion in Assets Under Management to break even based on the lower fees they are charging clients and the average account sizes of their clients (1). Betterment with an average of $28,000 USD (2). Assuming an average fee of 0.25% per annum, that’s $70 earned per client. And now there’s industry research that it can take between $300 to $1000 to acquire a new client (4).

Some firms like SigFig and Hedgeable are claiming that they spend $0 in marketing but this itself is misleading as firms are spending money on value added services at no cost to clients so these development costs are attributable to customer acquisition costs.

The challenges of scaling to profitability are also compounded by being able to retain these clients long enough for the life time value of the customer to be higher than the acquisition cost. So if it’s taking me $500 to acquire that customer, I need to keep them for 5–7 years in order to recoup my cost.

As the competition for assets within the automated direct-to-consumer robo-advisory space intensifies, the clear winners will be the larger institutions because they are better positioned to distribute their products to their current customers and to provide human advice when needed.