3 things to know about investor onboarding for funds in Luxembourg

Investor onboarding is a crucial process for funds in Luxembourg. A well-organised onboarding procedure ensures compliance with Luxembourg’s financial regulations and builds trust with investors. It involves collecting and verifying essential documents from potential investors, ensuring regulatory compliance, and maintaining accurate records. This article provides a detailed overview of the investor onboarding process, outlining key steps, challenges, and how Ocorian assists its clients in navigating this process.

1. What is investor onboarding?

Investor onboarding involves the process of incorporating new investors into an investment opportunity, such as a stock or fund. This typically requires collecting, organising, and securely storing personal and financial information to meet record-keeping regulations. During the onboarding phase, data security and ease of access are prioritised. 

Ocorian’s primary goal is to assist its clients in managing the influx of new investors, particularly during peak periods when resources may be stretched thin. The process involves administrative tasks such as contacting investors, collecting necessary documents, and populating data in the client's systems or on a dedicated e-platform that Ocorian can set up for its clients, including individual access for each investor.

2. What are the key steps in investor onboarding?

• Initial consultation: The first step is to meet and discuss with the client to understand their specific needs and requirements. This includes identifying the investors, outlining the policies and procedures, and determining the documents that need to be collected.

• Contacting investors: Once the plan is established, the next step is to contact the potential investors. This involves explaining the process, listing the required documents, and providing instructions on how to submit them.

• Document collection and follow-up: Ensuring the receipt of all necessary documents is critical. This step includes sending reminders to investors who have not yet submitted their documents and addressing any questions or concerns they may have.

• Review and reporting: After collecting the documents, the team reviews the data and compiles a report for the client. This report highlights any missing documents and provides a summary of the onboarding process.

• Cash reconciliation: In parallel of the documents collection, the team ensures that the subscription amount of each investor is safely received on the client’s bank account. The team reports immediately to the clients any issues identified and, in some cases, arrange with the investors to remedy the situation.

• Ongoing monitoring: For some clients, the onboarding process extends beyond the initial collection of documents. This involves annual reviews to ensure that all data is up-to-date and contacting investors for updated documents if necessary. The ongoing monitoring can also include the AML/KYC daily screenings based on the client’s procedure.

3. What are the challenges and risks when onboarding investors?

Investor onboarding involves managing a high volume of data and documents. Common challenges include missing documents, lack of reminders, and issues with data compilation. Ensuring a smooth process requires meticulous attention to detail and effective communication with investors.

How can Ocorian help its clients with investor onboarding?

Investor onboarding is a vital service for investment entities, helping them manage the administrative burden of onboarding new investors. Ocorian’ s Luxembourg team follows a structured process and leverages latest technology where it provides a seamless experience for both clients and investors. The expertise and flexibility of the Ocorian team can help deliver exceptional results.

For information about how Ocorian can support you with your investor onboarding requirements, get in touch with our team today.