CLIENT ONBOARDING: Moving up in Maturity

Transcription

1 CLIENT ONBOARDING: Moving up in Maturity By Cindy Sealey, CFA Principal - Client Facing Practice After a client decides to invest with your firm, onboarding is the first major task you perform for them, so it s important to set the right tone. Getting it right makes the client feel good about their decision to invest with you. Getting it wrong can make them question whether investing with you was a good idea after all. Onboarding often involves many staff members on multiple teams, and ownership of each task isn t always clearly defined. Communication, workflow, and hand-offs between teams is sometimes fragmented. And with no technology solutions designed specifically for onboarding clients in the investment management industry, each firm must use generic tools to design their own approach, which can vary widely by firm size, client types, and product complexity. We have observed some trends in onboarding being applied across the industry, and the model below can help you determine the maturity of onboarding at your firm, and what you can do to evolve your client onboarding processes.

2 THE MATURITY CURVE FOR CLIENT ONBOARDING Given the complexity and volumes involved in onboarding, some firms dedicate a team to lead the process and to play a key role in coordination. With high volumes and consistent onboarding types, some firms consider using technology to help with onboarding actions. To establish a process, firms start to define coordination methods as well as where hand-offs occur, and where data and documents are stored. With no real experience, firms in this stage are learning as they go through the steps. Everything is done manually and ad hoc. As a firm progresses, they apply project management processes to onboarding that involve defining the project team, timeline, and checklists. Project Process Dedicated Resources Technology Applied All Hands When a firm is just getting started or is launching a new investment vehicle, onboarding processes tend toward the manual and ad hoc (Figure 1). As onboarding matures, it is managed like a project, with a project team, a timeline, and a checklist that keep the process moving forward. Figure 1 With more maturity, onboarding becomes a regular end-to-end process, with clearly defined practices for communications, hand-offs, and management of data and documentation. When the firm or product line reaches a critical mass of clients, firms begin to dedicate resources to onboarding with experience managing everyday tasks as well as complex onboarding situations. Finally, when client volumes grow larger and processes become consistent for each client type and asset class, firms begin to employ technology solutions. The first is typically a workflow solution to facilitate entering, using, and storing the 2

3 related data, and to enable status reporting throughout the onboarding process to the teams involved. The next step is often automating the propagation of account setup data to key downstream systems such as accounting, trading, and performance. In a recent webcast, we asked our Cutter Associates members where they placed their firms along the maturity curve, and Figure 2 below depicts their responses. Do you recognize where your firm stands? ONBOARDING MATURITY AMONG INVESTMENT MANAGERS 35% 30% 23% 10% All Hands Project Process Dedicated Resources Technology Applied 2% Figure 2 Source: CutterCast, Client Onboarding, February 2017 With 40% of firms reporting that their onboarding processes are relatively immature, there are opportunities for firms to improve the onboarding function. By doing so, they would not only better define onboarding tasks internally, but also position the firm to be able to better handle increased inflows, and ultimately improve the process for new clients. 3

4 CASE STUDY: We need to onboard clients more efficiently. This Cutter Associates client is a multi-billion dollar firm managing investments for clients around the world. They manage various account types, including bank common funds, unregistered private funds, and non-us collective funds, as well as institutional and individual separately managed accounts. They found themselves fielding many internal complaints from all areas of the business about their inefficient processes for onboarding institutional clients. Employees had no way to track a client s status in the onboarding process, and they were unclear about who owned each task in the process. Hand-offs were inconsistent, and employees were opening accounts with inaccurate or missing data. Their inefficient onboarding process was driving potential business away. SOLUTION The firm asked Cutter Associates for strategic guidance to improve their onboarding process. We assessed their current onboarding resources and processes, and delivered comprehensive documentation of their current state. We then developed a scalable target state for their onboarding process, tailored precisely to their requirements, including well-defined roles and responsibilities for every task. We created a client, account, and product data master, as well as a custom fit data dictionary and data governance philosophy. We also implemented workflow metrics to provide better data for running the business. The firm s employees involved in onboarding are much more satisfied now. Their new, efficient process makes it much easier to communicate effectively with clients coming onboard. What once took seven days in the onboarding process now takes just two. Client satisfaction has increased demonstrably, which in turn has increased opportunities for referrals and cross-selling. 4

5 Want to upgrade your client onboarding process to ensure that your new clients always feel good about investing with you? Cutter Associates can help you take the next steps. Call us today on or +44 (0) or ABOUT THE AUTHOR Cindy Sealey has over 28 years of experience in the investment management industry. She leads Cutter Associates Client Facing practice and has consulted to investment firms on their institutional sales and client service practices, operations, data management, and strategic technology direction. Cindy has conducted system searches for client reporting, RFP, CRM, performance, accounting, performance, portfolio management, risk management, equity research, and GIPS composite systems. Prior to joining Cutter Associates, Cindy served as Vice President and Head of Operations for a division of Guggenheim Investments, where she led mutual fund accounting and administration; institutional accounting, billing, and client reporting; SMA operations, performance reporting (GIPS); fixed income performance, attribution and risk reporting; fixed income investment team support, insurance reporting, asset management technology, and equity and fixed income trade settlement. Cindy holds a B.B.A. from Washburn University and is a CFA charterholder.