Wealth managers grapple with long client onboarding times, study shows

By Puja Sharma

• Wealth management professionals experience substantial delays in the client onboarding process, which can often take more than three months for ultra-high net worth clients.
• Internal approval processes and the amount of manual intervention are cited as the biggest pain points, particularly so in the UK.
• 96% of relationship managers across all markets surveyed believe that simplifying or automating the onboarding process would support them in their role.

Wealth management clients worldwide experience significant waiting times in the onboarding process according to research from Avaloq, a global digital banking solutions and wealth management technology firm.

Despite the onboarding process being one of the most important milestones in the client relationship, setting the tone for future interactions, Avaloq’s research found that 29% of wealth management professionals say it takes them three months or more to onboard ultra-high net worth (UHNW) clients, with only 13% putting the onboarding time for UHNW clients at up to one week. The survey results show that the wealthier the new client, the more protracted the onboarding process typically becomes. Nevertheless, even in the affluent segment, one third (33 percent) of wealth management professionals state that onboarding can take up to one month.

The experience of wealth management professionals varies between the UK and the other markets included in the survey. According to Avaloq’s research, wealth management professionals in the UK deem tasks associated with onboarding as more onerous than their European counterparts. For example, internal approval processes were highlighted as a pain point by 88% of UK respondents versus 76% in Europe, and manual intervention was flagged as an issue by 70% of UK respondents compared to the European average of 62%.

This disparity was also evident in the tasks deemed most time-consuming, with 70% of UK respondents claiming that know your client (KYC) checks take too much time, versus 63% of European respondents, and 55 percent stating that setting up client accounts is too time consuming, compared to 51% in Europe.

When asked what would support them in their current role, 96% of relationship managers globally stated that simplifying or automating the onboarding process would offer 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 for the UK and Ireland at Avaloq, said, “The onboarding process leaves clients with a lasting impression of their new wealth manager, so it is vital that it runs smoothly. Not only does this set the tone for a positive client relationship, but it also increases the chances that the client is likely to stay and invest over the long term.”

“It is concerning to see that wealth managers face such hurdles when onboarding clients. Technology can transform the onboarding process by automating and streamlining regulatory checks while integrating consistent onboarding templates in the firm’s platform. By automating manual processes, wealth managers can focus more time and resources on providing better client service and gain a competitive advantage over their peers.”