Fintech
Wealth Managers Grapple With Client Onboarding Times – Avaloq Research
Wealth management clients around the world are experiencing significant wait times in the onboarding process according to Avalok research, a global leader in digital banking solutions and wealth management technology.
While the onboarding process is one of the most important milestones in the client relationship, setting the tone for future interactions, Avaloq research found that 29 percent of wealth management professionals say it takes three months or more to onboard ultra-high net worth (UHNW) clients, with only 13 percent estimating the onboarding time for UHNW clients at up to a week. The survey results show that the wealthier the new client, the longer the onboarding process typically becomes. However, even in the affluent segment, a third (33 percent) of wealth management professionals say onboarding can take up to a month.
The experience of wealth management professionals varies between the UK and other markets surveyed. According to Avaloq research, wealth management professionals in the UK find the tasks associated with onboarding more burdensome than their European counterparts. For example, internal approval processes were highlighted as a pain point by 88 percent of UK respondents compared to 76 percent in Europe, and manual intervention was cited as an issue by 70 percent of UK respondents compared to the European average of 62 percent.
This disparity was also evident in activities considered more time-consuming: 70 percent of U.K. respondents said that KYC (Know Your Client) checks take too long, compared to 63 percent of European respondents, and 55 percent said that setting up customer accounts takes too long, compared to 51 percent in Europe.
When asked what would support them in their current role, 96% of relationship managers globally said that simplifying or automating the onboarding process would provide a minor or major improvement. This indicates a substantial opportunity for technology providers to support wealth management firms with advanced onboarding capabilities.
Suman Rao, Managing Director UK & Ireland at Avaloq, says: “The onboarding process leaves clients with a lasting impression of their new wealth manager, so it’s critical that it runs smoothly. Not only does this set the tone for a positive client relationship, it also increases the likelihood that the client will stick around and invest for the long term.”
“It is concerning to see wealth managers facing such obstacles when onboarding clients. Technology can transform the onboarding process by automating and streamlining regulatory checks while integrating consistent onboarding templates into the firm’s platform. By automating manual processes, wealth managers can devote more time and resources to providing better client service and gaining a competitive advantage over their peers.”