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A modern tool for digitizing investor onboarding

investor onboarding
By Sylva Sivz BComm. Reviewed by: James Rose. Last Updated July 4, 2024

The investor onboarding process marks the initiation of new relationships between investors and financial institutions. It’s a crucial process that sets the tone for future interactions between the parties.

A streamlined investor onboarding process can help you leave a good impression and ensure beneficial relationships that last long-term. But if you manage all the tedious steps manually, you can run into plenty of hurdles and delays, turning investors off and leaving you with missed investment opportunities. 

In this post, we’ll go over the steps of the investor onboarding process, the most common challenges you might run into, and how you can digitize the process for more efficiency when you use the right data collection tools. 

Let’s explore! 

Tools for onboarding investors

What does the investor onboarding process involve?

Investor onboarding might sound like just another bureaucratic pain, but it's a crucial process that sets the stage for good partnerships and helps guarantee the safety of everyone involved. 

Here are a few steps you’d expect to complete as part of investor onboarding:

1. KYC requirements 

If we were to put this in simple terms, KYC is a financial institution’s version of a questionnaire for a first date. They want to know everything they can about the investor to get the ball rolling. The investor needs to be incredibly transparent in this step to build trust. 

Information a fund manager would collect during the KYC step includes information about the investor’s identity, financial history, and risk tolerance.

Related: Use this KYC checklist to keep your company safe

2. Risk assessment 

This is where things get a bit more serious. Financial institutions need to assess the level of risk associated with each investor to tailor their services accordingly. They need to know exactly what they’re getting into. By conducting thorough risk assessments, financial institutions can mitigate potential pitfalls and steer investors toward opportunities that best align with them.

During this step of investor onboarding, a fund manager would be asking questions about investment goals, the investor’s financial background, and risk appetite. 

3. Compliance checks

Compliance checks are intended to help keep everyone safe and ensure there are no legal hiccups ahead. Compliance checks verify that both the investor and financial institution are doing their part to adhere to industry regulations like anti money laundering AML protocols. Fund managers need to be incredibly thorough with these compliance checks, making sure no stone is left unturned.

Each of these steps involves the collection of sensitive investor data and legal documents to help both entities have a complete picture of each other and lay a solid foundation on which they can operate. 

Investor onboarding process

What are the challenges of manual onboarding processes? 

Managing the investor onboarding process the traditional way (without the use of modern tools) can be problematic as an outdated process comes with many challenges. Here are a few reasons why the process can become so tedious. 

1. Signing physical forms 

If the parties are signing paper forms, there may be delays in getting everyone at the same location to sign documents or delays in sending documents to one another via courier. 

2. Endless email follow-ups 

A huge reason for delays in this onboarding process is the fact that fund managers may ask investors a series of questions to begin with, and then have to follow up with additional questions over email later on. All of this back and forth can mean unpredictable timelines for how quickly the project is moving along.

Related: How to reduce back-and-forth emails

3. Manual data entry

Once investor data is collected, fund managers have to spend their time entering financial data into appropriate systems to verify their information. Given how much information is collected, this can take ages. It can take even longer if they need to input the same information into multiple systems. This doesn’t only take time, but manual data entry leaves too much room for human error. 

4. Repeated intervention 

Each step of the investor onboarding process involves some form of manual intervention to authenticate investor data. Every intervention in the verification process also leaves room for human error and slows the entire process down. 

Without pivoting to using modern tools for onboarding investors, all the inefficiencies of these manual processes can add up. The worst-case scenario is that the process is so tedious that the potential investors decide to drop out.  

Digital investor onboarding

How can data collection tools help with investor onboarding?

Even if you don’t have a dedicated investment platform, you can still streamline investor onboarding with a data collection tool. 

These tools are an absolute necessity in the financial industry, and most of them are designed to tackle the complexities of compliance, security, and accuracy. 

Here are a few ways that using a dedicated data collection tool can help you:

1. Automating tedious tasks 

The best data collection tools come with a list of templates and customizable forms you can use to ask investors the right questions without having to build questionnaires from scratch. This in itself can be a big time-saver right from the start. It also reduces the need to rely on all those back-and-forth emails. 

2. Reducing errors

Collecting investor information in one centralized dashboard removes the need to manually input information into a system, minimizing errors. This can bring a sense of relief knowing you won’t have to deal with data entry errors that could have substantial negative implications on the whole process. 

3. Speeding up data collection 

Using modern tools for digital investor onboarding means slashing onboarding timelines. Sending questions and collecting answers more quickly helps you provide a smoother experience to your investors and stand out for it!

4. Automatically protecting sensitive information 

Email is far too prone to the potential of data leaks, but data collection tools are already built to do what financial institutions need them to do, and that's to protect sensitive information. These tools often offer multi-factor authentication, data encryption, and other security features to keep financial information and legal documents safe. 

Related: How secure is email? Hint: not secure enough

5. Integrating with existing systems to optimize workflows  

Modern investor onboarding tools are built to play nicely with other investment platforms that fund managers use day-to-day. They offer integrations that are intended to streamline financial workflows.  

Recommended tool for investor onboarding: Content Snare 

Content Snare for investor onboarding

Content Snare is a digital onboarding tool that financial institutions rely on to streamline their onboarding processes. Here are a few reasons why you might want to consider using it to onboard investors. 

1. It comes with a list of onboarding templates you can choose from to save time so you don’t have to write your own investor questionnaire from scratch.

2. It helps you identify and respond to errors early in the process. Once an investor submits their information, you can approve/reject/comment on every response. That way, if you see an error, you can fix it way earlier in the process.

3. The tool lets you set an automatic reminder schedule and will remind your investors to complete your request by that deadline. That way, you don’t have to follow up over email constantly. 

Content Snare automatic reminders feature

4. The tool is built with the client experience in mind. Knowing damn well that investors will need to give you plenty of information and upload documents, it comes with auto-save features, allowing your investors to complete your forms in chunks if needed.

5. Content Snare comes loaded with plenty of security and compliance features to keep all the sensitive information you collect from investors protected from unauthorized access.

6. To help you with your onboarding workflow, Content Snare also offers a number of integrations and an API to help you connect the tool to other platforms you depend on every day.

It even offers a free trial so you can take all its features for a spin and see how it works.  

Final advice for fund managers  

There’s no way around it, the investor onboarding process will always involve many crucial steps, and it absolutely should. 

Nevertheless, turning to a data collection tool like Content Snare or other alternatives is a smart way to streamline the process so you can save time, work more efficiently, ensure compliance, reduce errors, and focus your time on the more exciting parts of working with investors.  

Onboard investors faster than ever with Content Snare

Content Snare makes it easier than ever to collect the information you need from your investors. Get investor onboarding templates, automatic reminders, and collaboration features all in one comprehensive tool. 

Start your free trial


Sylva Sivz

Sylva Sivz is a seasoned copywriter here at Content Snare, based out of Vancouver, Canada. She has spent years working in agency environments and moonlights as a touring house DJ!