Much like how people are quick to write a review online when they have a bad experience, your clients will remember the smallest missteps during the onboarding process. Statistically, negative experiences are shared more often than positive ones, and a poor onboarding experience can be a significant roadblock to growth. That’s why it’s crucial to perfect your onboarding process—so you have the ability to scale efficiently and provide a consistent, positive experience for every client.
Red Flag: Delays
One of the biggest signs that your onboarding process isn’t effective is that it takes too long or often hits delays. Bottlenecks or extra steps can create frustration and hurt a new client’s first impression of their advisor. When onboarding a new client or opening a new account, simple is always better. Any extra or repetitive steps slow down the process. Researchers have proven that the simpler the process, the more engaged and satisfied the clients.
Every signature, income statement, and tax form requires back-and-forth communication, adding steps to a lengthy process. And as the amount of client data increases, data silos are becoming a bigger problem, lowering operational efficiency and slowing the entire process.
Keeping the process simple means automatically filling in repetitive information in multiple fields and clarifying what clients need to fill out on one form, not dozens. Integrating data-gathering with other systems, like customer relationship management (CRM) software and portfolio management tools, means clients only have to enter information once, which creates a smoother and faster experience.
Red Flag: Confused Clients
Onboarding can be routine for advisors and firm employees — many of whom work through these processes and systems daily. But for new clients, especially those who have never had a financial advisor, too much jargon or a lack of communication can be confusing and overwhelming.
Don’t assume your client knows all the details. Ask questions, listen, and provide regular client updates to avoid frustrating communication gaps that can lead to delays, misunderstandings, and unmet expectations.
When the onboarding process isn’t standardized or doesn’t include regular client communication, clients and staff can easily get confused and not know the status of their accounts or financial information. Trust is central to the client-advisor relationship, and that comes through in regular communication.
To avoid this issue, make communication a cornerstone of the onboarding process. Build in checkpoints to provide regular updates and make yourself available to answer any questions. Clients will feel more comfortable when they know the status of their new accounts and investments, which sets the stage for a strong relationship.
Red Flag: Errors
Because so much data is collected during the onboarding process, errors and compliance issues are common. When back-office staff have to manually enter client information in multiple systems or transfer it from physical forms, mistakes can occur. If your onboarding process leads to unreliable data or inaccurate information, it’s a major sign that the process is ineffective.
Errors aren’t just frustrating for clients and advisors — they can also cause a firm to fall out of compliance. Advisors must carefully check numerous compliance boxes in the early phases with new clients and accounts. Failure to do so can lead to serious issues later, leading to time-consuming (and expensive) fixes and the erosion of client trust.
Two FINRA requirements, Know Your Customer (KYC) and Anti-Money Laundering (AML), are crucial to compliance and are designed to protect clients from illegal activity. These requirements are essential to keeping your company honest but can be time-consuming, especially when verifying new client information. Cutting corners or using inconsistent or unreliable methods can lead to KYC and AML issues.
PreciseFP includes a data quality score with every record, ensuring you’re meeting FINRA’s KYC requirements. This integrated system pulls client data, removing the need to re-enter information multiple times. By streamlining the process, it creates a single source of truth, eliminating conflicting data that can slow things down and cause confusion.
The result? Real-time, accurate information, improved onboarding, and significant time and cost savings.
Start your free trial of PreciseFP today and let us know how we can help you blueprint your onboarding experience.
