Onboarding clients is still a key friction point for advice practices as the collection of data and dealing with various compliance obligations slows down the advice process.
Evalesco Financial Services chief executive Jeff Thurecht tells Professional Planner onboarding a new client takes too long, and that is “probably the friction point at the moment in our business”.
Thurecht adds that even though the firm is “doing reasonably well” with onboarding, it needs to do better.
For onboarding new clients there’s not only multiple steps – from the fact find and data collection to the implementation of the advice – but also making sure all compliance obligations are being fulfilled along the process.
“All that stuff comes into play and it takes a long time to onboard a client in a holistic advice environment, which is what we try to do,” Thurecht says.
He adds the challenge of data collection has improved with technology, but he concedes there will always be limitations.
“You’ve just got to do the best you can with what you’ve got,” Thurecht says.
“Because we’re governed by some pieces of legislation and different areas, different regulators, there’s duplication and there’s areas where [you might get regulatory relief from one part] but you have to do it anyway for another area.”
Another advice firm, Think Capital, found success in reducing its onboarding time. Owner and financial planner Norma Falconer says the firm shortened their onboarding cycle which used to take between six to eight weeks.
“Now it’s four weeks from the first consult to getting everything that we need,” Falconer says.
“I know that might sound inefficient in other firms, but if I could learn from somebody else to do that better, I would.”
It wasn’t just internal operational efficiency that helped improve the onboarding process – the firm also started incentivising clients to prevent the process from coming to a halt.
“If they don’t deliver by a certain deadline they pay an extra fee,” Falconer says.
“The more touch points that we need to do to get data from the client to do our job, the more the fee goes up.”
Thurecht pointed to lack of access to the ATO portal – a key advocacy priority of the Financial Advice Association Australia – as a solution that would also help ease the process by collecting client data in a quicker and more accurate method.
“You’ve got to go accountants, who give you the wrong information on the client anyway; or go to the client and ask them to do things. That slow things down and makes it problematic.”
TruWealth director and principal financial adviser Natallia Smith says her biggest business operational priority is continuing to serve clients the best possible way and ensure they are receiving the most value.
“Clients have high expectations and they would like really good quality service,” Smith says.
While she says this has always been the case, client expectations have increased and client situations have become more complicated, pointing to the rise of blended families as an example of circumstances that have a lot of nuances to navigate.
“The expectations come from the technology side of it because they’re so used to getting quite good exposure to what they can invest in easily,” Smith says.
“They learn so much more and their knowledge is quite high, but they’re still ineffective when it comes implementing what they actually want to do and they don’t really know what to do.
Smith says clients expect an adviser to tell them what to do in a simple way which can be a challenge due to the complex nature of advice and the issue is only compounded when clients deal with wait times for the advice.
“I’ve heard that it takes 25 hours to onboard a client and obviously the compliance burden is there, but clients don’t understand why it takes 25 hours to onboard and help them,” Smith says.
“They’re used to more of a quicker and technology friendly approach. When you have a client who expects that from a financial planner as well, that’s where the disconnect is.”
Like Smith, LifePath Financial Planning co-founder and senior financial adviser Brad Monk says client needs haven’t become more sophisticated, but their understanding has, due to a proliferation of AI which has improved their research capabilities.
“Inquiries are high, so people are busy,” Monk says. “Advisers are very busy, [but] it puts a lot of pressure on themselves and on the system to make sure the clients get what they need and deserve.”
