What could be bad about hearing what your clients think? Listening to clients has the opportunity to deepen relationships, attract new customers and improve the bottom line. But still, firms find reasons not to put a systematic client experience programme in place.

It has been almost two years since I joined Scorpio Partnership.  From the start, one of the most important things I was tasked with was to advance the thinking around the links between client experience and the link to financial performance.

Over the course of the past two years, I’ve met with all types of firms – large national brokerages, regional firms, private banks, independent broker-dealers, and even small community banks.  These meetings have been overwhelmingly encouraging, with the vast majority clearly stating their focus on the end client experience.

However, despite 100% agreement on the importance of taking care of the client, I have also found huge differences with how the client experience is thought about and measured.  Sorting through the internal, external, organizational, and industry challenges from my many client meetings, below are the top five misconceptions I’ve found as it relates to the client experience:

  1. “My clients love me”

I believe it’s true that the vast majority of client relationships are good – if not, then why are they still a client?

That said, I have also observed that many firms and advisors tend to overestimate the strength of the bond with their client.  In a recent survey of investors with between $250k-$500k USD in investable assets, we found that almost two-thirds (65%) state “their advisor is a service provider who is as involved as I feel he/she needs to be” whereas just over one-quarter (28%) state that “my advisor is deeply entrenched in the ongoing events of my life, advisory or otherwise”.  When you move up to clients with over $5MM USD in assets, this jumps to over 4 in 5 (83%) who state their advisor is at arm’s length.

The reality is that there is a huge difference between clients who just like vs love their advisor and firm.  Further, vast amounts of research clearly show a substantial difference in both sentiment and financial behavior among these two client groups.  Understanding the drivers between good and great spell the difference between average and market leading financial growth.

  1. “My advisors would never go for it”

This is one of the most common, and true, statements I have come across and there are a myriad of reasons given.  These range from, “if I’m productive, just leave me alone” to “they’re my clients, not yours”.  The key to a successful program is to present the proposition as a value-add that is going to help an advisor grow their business.

Too often, client research programs are abstract and only focus on a bunch of satisfaction questions and a vague likelihood to recommend metric, which can be very challenging for advisors to interpret and, more importantly, design action plans around.  If you can clearly articulate the financial impact of specific actions that both optimize client sentiment and financial behavior, advisors are much more open to the idea.

  1. “Surveys don’t go over well with wealthy individuals”

This is probably the biggest misconception held by many in the industry.  Skeptics argue that HNW investors are too busy, don’t have the time for surveys, and some even suggest that surveys detract from the brand experience.  We’ve found that this couldn’t be further from the truth.

While it’s true that HNW typically very busy individuals and often have much higher expectations as it relates to service, when handled appropriately in terms of communication, brand consistency, and presentation, we have observed survey response rates as high as 70%.

  1. “The costs don’t justify the benefit”

In the world of instant gratification, it’s hard to justify the long term play of improving client satisfaction.  After all, if I recruit five financial advisors, the financial benefit is easy to calculate and immediate.  However, along with the recruit comes two to three years of baggage in terms of paying down the often times significant package associated with the hire.

It’s encouraging to see that many firms I’ve met with are turning from the recruiting battles and staking their claim on organic growth through referrals and increasing share of wallet.  Certainly, understanding the client experience drivers of advocacy and asset consolidation are critical to success in this area.

  1. “We’re too small”

Wealth management firms come in all shapes and sizes.  The largest have millions of customers while the smallest firms have just a handful of financial advisors and a client count in the hundreds or less.  Even among the smaller firms, I have observed many have dipped their toes in the survey waters, most commonly fielding a one-off survey of their clients.

More often than not, client experience improvement efforts are abandoned shortly after the results come in.  The unfortunate reality is that after the high fives and back slapping from the typically high survey scores, executives at smaller firms are unsure what more to do with the data they’ve collected .

Things to consider for everyone, but particularly the smaller firms, when embarking on a client experience measurement program should be:

a. Have a clear objective in mind – Beyond knowing how your clients feel about you, have a plan around what you’re going to do with the insights.  Design questions that will help you take action on things you can improve.

b. Set goals and accountability – It’s critical that someone owns the effort and that there are action plans around client service modeling and training that follow the insight gathering phase.

c. Ensure frontline advisors and support staff are on board – As mentioned earlier, framing the engagement as a tool to help advisors improve and demonstrating a clear link to improved financial performance is critical to a successful program.


News from the world of wealth:

The Age of Artificial Intelligence in Fintech – Forbes

BofA’s Cost Cutting Pays Off for Wealth Management – Nasdaq

Asia’s wealthy should look towards lifestyle preservation – Business Times

High performing businesses in the context of wealth management – YouTube

StanChart to launch digital banking across nine countries – Financial Times


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David Lo, Scorpio PartnershipAuthor: David Lo, Associate Partner

Background: David has 15 years of market research experience and joined Scorpio Partnership from JD Power and Associates where he was responsible for the financial services practice.

Education: David completed a degree in business at Central Michigan University and received a MBA from Oakland University.

And at the weekends: In his spare time, David spends his time thinking of new and easier ways to explain to his family what exactly he does for a living.


Photo from ZoonaBar, used under creative commons license


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