A costly mistake: the true cost of selecting the wrong onboarding solution in wealth management

Hindsight may be a wonderful thing, but its timing is not. And this is no more the case than in wealth management. An industry steeped in tradition, wealth management firms are all-too-often underpinned by inefficient and outdated legacy systems that cannot accommodate client needs or the regulatory expectations that underpin these.

Since the financial crisis, financial services firms have racked up eye-watering penalties for falling short of their KYC and AML obligations, with some of the most high-profile names in wealth management amongst them. But while it may be a given that the early stages of the client relationship are critical to collating the insight firms need to keep their powder dry, wealth managers and private banks regularly choose inadequate onboarding solutions that fail to stand up to the job.

Whether firms take a sticky plaster approach to updating their systems, choose a siloed solution or create their own solution in house, choosing the wrong onboarding solution can be a costly mistake. A cheaper alternative to strategic, end-to-end solutions may well seem like a quick and cost-efficient fix but implementing ill-fit solutions and processes can impact client journeys, result in chequered client profiles and impede audit trails and overarching compliance.

With a collective 35 years of driving change within private banks and wealth management firms, Wealth Dynamix and Chappuis Halder have seen first-hand the hefty price that firms can pay in cutting corners with onboarding. The two firms have collaborated to share their insight in a webinar that shed light on why firms choose the wrong solution, and the real impact of getting it wrong.

In the webinar, 3 reasons wealth managers fail to get onboarding right we explored the main drivers that prompt firms to implement the wrong onboarding solution and the true impact of doing so.

Lack of strategic mapping in the onboarding journey

As businesses grapple with rising costs, squeezed margins, and increased competition, it can be tempting to take a quick-fix approach to drive a smooth and seamless onboarding process. But this rarely delivers. Failure to step back and take a bird’s eye perspective on the business and the processes that underpin it is a missed opportunity that could cost firms dear.

Only by mapping out the end-to-end client journey will businesses be able to identify problems, inefficiencies, and where capability gaps exist. Businesses often take a compartmentalised approach to client relationship management. Yet as the vital initial stages of high-net-worth engagement typically precede onboarding, a seamless approach across the full client lifestyle is critical to consistent compliance, efficient and effective processes, and driving critical client insight.

Siloed approach to innovation

Onboarding is the crux of good wealth management. Without truly understanding the client at hand, it’s impossible to deliver a personal service that safeguards clients and their wealth management provider alike. Yet firms regularly treat this vital component of the client relationship as a single point in time and rely on equally short-term processes to incorporate their clients into the fold.

A cohesive approach spanning the whole client relationship will unlock powerful insights and give advisors the means to provide a targeted service as clients’ wealth and wider circumstances evolve. And it works both ways: if firms focus their efforts and their budgets on honing the onboarding experience but overlook the wider delivery of service, they could well see the client relationship falling short of their expectations.

Time and again we see firms take a blinkered approach in devising and implementing their processes and confining these to internal IT experts. Technology now underpins every aspect of a business, so it’s vital that client relationship management follows suit. Business-wide engagement in the client relationship management strategy and realisation has been proven not only to drive game-changing insights but to transform the client and adviser experience in the process.

Choosing the wrong system

Widespread consolidation across the fragmented wealth management industry has resulted in amalgamated back office systems with multiple bolt-ons that tell the business’s story. While legacy systems often sit in the back office, their impact on the client experience should not be underestimated. Some of the most successful firms rely on core banking systems to manage the client journey and the intelligence that underpins this.

Typically built from the top down, old technology platforms were often built to accommodate a single client account, rather than current, savings and credit card accounts many private clients hold today. It’s essential that industry firms break away from the mould and invest in the systems they need to carry their clients, their people, and their businesses into the future.


Wealth Dynamix delivers Client Lifecycle Management solutions to the world’s leading private banks and wealth and asset management firms.


Operating your Client Lifecycle Management solution from the Cloud

22 November 2023

Operating your Client Lifecycle Management solution from the Cloud

Cloud technology can secure diverse benefits for wealth management firms seeking greater efficiency and improved cost-to-income ratios. Read on for ways to safeguard the success of your migration.

5 min. read

Build vs buy? The CLM expert’s view

16 November 2023

Build vs buy? The CLM expert’s view

High-quality client service for HNWIs and UHNWIs is mission-critical for any wealth management firm to prosper, but how do you achieve it? We unravel the long-standing ‘build versus buy’ debate.

5 min. read

Dear CEO: A direct call to action

14 November 2023

Dear CEO: A direct call to action

Our latest article dives into the FCA's recent mandate for wealth managers and the implications of their statement that supervision will become “more targeted, intrusive and assertive".

3 min. read

Sign up to our Newsletter

Client Onboarding