There is a lot of talk in the wealth management industry about the importance of smooth client onboarding, but many firms in the sector are still not hitting high standards, a Breakfast Briefing has heard.

Wealth management still has a long way to go to keep up with the complexities and demands of onboarding new clients, delegates have been told at a recent Breakfast Briefing in Singapore. (For specific details, see here.)

Details of a research report produced by Appway and Kapron Asia, entitled “The fastest One Wins: How Wealth Managers Conquer New Market Segments with Digital Onboarding”, were shown to the audience, highlighting that a digital approach only equated to 14 per cent of the companies surveyed with over 45 per cent still totally dependent on paper. This meant that the time it took to onboard a new client was likely to be between 10 and 20 days. As a result, it is an inefficient procedure for both client and wealth manager. Another key finding was that more than 65 per cent of those questioned said they were concerned that the time it took could mean the client withdrawing from the process. 

The report, written by Zennon Kapron (see details below), also highlighted that through the increased use of digital technology, there were revenue opportunities within the onboarding process. According to the report findings, 86 per cent of professionals who completed the survey agreed that compliance information can be used to identify revenue opportunities. By analysing clients’ information, opportunities arise to provide tailored products to the prospect.  

The Breakfast Briefing, held in the Swissôtel The Stamford, Singapore, featured the following speakers: Kapron, director, Kapron Asia, an Asia-based market research firm; Shiu Kai Wing, executive director, Julius Baer; Philip Schoch, head product digital banking and onboarding, Appway; Kong Eng Huat, chief executive of EFG Private Bank; and Keith Harrison, general manager, Singapore, at Abcare, the insurance broker. Appway sponsored the event.

Kong said that as a result of the introduction of the Common Reporting Standard, a global regime governing exchange of information designed to root out dirty money, over the next couple of years, the onboarding process will not get easier. “The relationship manager is the first line of defence,” Kong said, adding that firms were relying on the relationship manager to know their clients' background and source of wealth before submitting to compliance for onboarding. "Digital is the way forward so that all the information is captured and shared from RM to operations and compliance,” Kong said.

Shiu from Julius Baer said that with new technology and better training of both relationship managers and compliance, the process could be down to days rather than weeks within five to 10 years. He added: “Companies need to invest in multiple systems. So much information is out there but it’s how we collate it and use this."

The age-old problem of communication between the RM and compliance segments was also discussed at the Briefing. Keith Harrison, CEO at Abacare, said compliance staff needed to be more socially interactive with the front-office relationship managers. “Early transparency and sharing of information” can only assist both sides, said Harrison. 

The panel, chaired by ClearView Financial Media chairman Bruce Weatherill, agreed that the introduction and development of new digital solutions from companies such as Appway could only benefit clients and firms alike. But panellists said there were still generational issues when it came to the use of technology through smartphone and iPad apps between older RMs and compliance and operations. “Digital is the way forward, but it has to be communicated and enforced. Everybody has to follow the internal processes to make it work,” Harrison said.

To receive a copy of the report, please click here to download.