Onboarding
Onboarding is the structured process of integrating new managers or allocators, involving due diligence, compliance checks, and technical setup.
What Is Onboarding?
Onboarding is the structured process of integrating new managers, allocators, or investors into a fund, platform, or investment system. It goes beyond a simple introduction, encompassing a series of steps designed to ensure all parties meet legal, regulatory, and operational standards. The onboarding process is foundational for building trust, enabling smooth collaboration, and setting the stage for a long-term, compliant relationship.
How Does Onboarding Work?
The onboarding process typically involves several key stages:
Collecting and verifying essential information and documentation (such as identity, ownership, and source of funds)
Conducting due diligence and compliance checks, including KYC (Know Your Customer), AML (Anti-Money Laundering), and sometimes enhanced due diligence for higher-risk profiles
Setting up technical infrastructure, such as access to trading systems, reporting tools, and secure communication channels
Educating the new manager or allocator about investment strategies, reporting requirements, and operational procedures
Ongoing monitoring and periodic reviews to ensure continued compliance and data accuracy
Why Is Onboarding Important for Fund Managers and Allocators?
Onboarding is critical because it:
Ensures all parties comply with regulatory and legal requirements, reducing the risk of financial crime and non-compliance penalties
Builds trust and rapport from the outset, laying the groundwork for a strong, transparent relationship
Improves operational efficiency by standardizing processes and reducing manual errors
Provides a positive first impression, which can enhance investor satisfaction and long-term retention
Example: Onboarding in Practice
A fund manager onboarding a new allocator will collect and verify the allocator’s identity, perform due diligence checks, and provide access to the fund’s reporting platform. The allocator receives an overview of the fund’s strategy, compliance framework, and operational timelines. Once all documentation is complete and systems are integrated, the allocator can begin investing and monitoring performance through the established channels.
When Should You Use Onboarding?
Onboarding is essential:
Whenever a new manager, allocator, or investor joins a fund or investment platform
During fundraising rounds as new commitments are secured
When expanding into new jurisdictions with different regulatory requirements
For periodic reviews and updates to maintain compliance and operational integrity
