by Griffiths + Associates Ltd
4th March 2024
This time, we'd like to touch upon an essential topic like the client onboarding process. The topic is very relevant, as there is still a belief that setting up a company or carrying out an audit is something simple like online shopping; just google corporate service providers and choose one of them based on your preferences.
Remain objective, we have to say that this is not impossible – it is not a problem to register a company, but the problem is what you will have after. Typically, troubles come afterwards as the process of setting up a company involves more than just the initial registration. Unfortunately, the advertised simplicity and low cost of company formation often do not capture the complexities and ongoing responsibilities that follow.
You should understand that services related to the establishment, management, and maintenance of legal entities are often regulated and demand a high level of responsibility and meticulous attention to regulatory compliance due to the potential risks associated.
The need for regulatory compliance driven by such key aspects like Anti-Money Laundering & Counter-Terrorist Financing compliance, Data Protection & Privacy compliance, Intellectual Property compliance, Ethical Considerations and Professional Conduct, and others.
Non-compliance with regulatory requirements can lead to legal consequences and reputational damage. Therefore, responsible, and reputable Company Service Providers prioritize regulatory compliance, invest in robust compliance frameworks, and stay informed about changes in laws and regulations that may affect their operations and the clients they serve.
Griffiths + Associates' Client Onboarding Approach
- Introduction and initial inquiry:
The client expresses interest in our services, either through our website, in-person, or via other channels. An initial inquiry may include a request for information about the services offered, fees, and the onboarding process.
- Initial communication:
We provide clear and informative communication to the client about our services, fees, policy, and the onboarding process. Offer FAQs, or guides to help clients understand what to expect.
- A pre-onboarding client assessment.
This step is a critical in the client onboarding process and involves evaluating potential clients before initiating a formal business relationship. This assessment is aimed at categorizing clients based on their risk profile, determining the level of due diligence required, and ensuring compliance with regulatory requirements.
A pre-onboarding client assessment includes:
- Initial assessment:
We conduct an initial assessment to determine the client's needs, risk profile, and suitability for our services, and identify any potential red flags or specific requirements that may need further attention.
- Request for information:
Once the client indicates satisfaction with the fees, we initiate the simplified Know Your Customer (KYC) procedure, which implies to issue request for information or initial questionnaire to collect essential details from the client (business details, and the purpose of the engagement). This due diligence on the potential client is conducted to assess their legitimacy, business activities, and adherence to ethical standards.
- Initial risk categorization:
Based on the information provided, we categorize the client into different risk levels (e.g., low, medium, high), that helps us to determine the appropriate level of due diligence.
This step is essential for risk management, preventing financial crime, and safeguarding our reputation and regulatory compliance.
- Discussion of fees and terms & Engagement Proposal:
Only after successful completion of the KYC process and due diligence we proceed to discuss fees and terms. We provide the client with an engagement proposal that outlines the scope of services, fees, and terms. This ensures that both parties have a clear understanding of the services to be provided, associated costs, and any additional terms or conditions.
- Client Acceptance and Engagement Letter:
Once the client accepts the proposal, we proceed to the formal onboarding process. The final step involves the signing of an engagement letter, which formalizes the business relationship between us and the client, and serves as a legal document that helps clarify expectations and obligations for both parties.
The engagement letter typically includes terms, conditions, and mutual obligations.
As you can see, client onboarding process is indeed a crucial phase in the client-business relationship and significantly impacts the overall client experience. It encompasses the initial stages of bringing a new client into the fold, setting the tone for the entire business relationship.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
