From minimizing the costs of client experience delivery to tips and tactics for building advisors’ EQ, The VIP Forum tackled a variety of wealth executives’ top agenda 2012 items across the first quarter.

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Wealth managers most commonly cite limited new client acquisition and expansion of existing relationships as their greatest obstacles to revenue growth. Firms are now investing in improving the client experience to attract prospects and deepen relationships. Many executives view the client experience as static, when in fact clients’ loyalty drivers change as they move through the sales, onboarding, and ongoing stages of the relationship life cycle.

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The commoditization of the wealth offering over the last two decades has forced firms to compete by offering ever greater service levels. Since open architecture made differentiation through products all but obsolete, firms have been forced to compete by offering an ever more expansive suite of services to attract and retain clients. Read More »

The News: Given today’s chaotic financial environment, innovative wealth management firms are looking to develop the softer side of how they interact with clients by improving client feedback loops.

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The News: Recent VIP Forum research shows that 59% of highly-loyal clients are likely to increase assets at the firm, 57% are promoters and 77% of them recommended their advisor in the past 12 months, and these behaviors can double revenue per client.

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With a majority of wealth management executives looking to the client experience as the path to growth, it is imperative for firms to understand exactly what matters to clients today. The Forum’s recent analysis of over 1,000 HNW clients working with an advisor reveals just that. We identified the distinct activities that kill loyalty, build loyalty, and those that have no impact.

Specifically, we found that client experience factors contribute to client loyalty differently and fall in three distinct categories:

• Loyalty Killers: Activities that if done poorly cause a decrease in loyalty, but doing them extremely well does not increase loyalty.
• Trivial Activities: Activities that do not impact loyalty, regardless of poor or excellent performance.
• Loyalty Builders: activities that clients reward firms for doing well, but do not penalize firms for doing poorly.

And, interestingly, our research shows that in order for clients to ever recognize firms’ delivery of loyalty builders, firms must first meet the bar on loyalty killers.

Access the Forum’s Client Experience Opportunity Map to learn about the specific loyalty killers, loyalty builders, and trivial activities.

Over 70% of clients rating their financial planning or annual review experience as excellent recommended their advisor in the past 12 months, compared to just 47% of clients in general. Read More »

With markets churning on every bit of new news across the globe, it is no surprise that wealth management firms see an opportunity to rebuild client trust by demonstrating the value of their advice. Indeed, to manage through moments like this is exactly why clients pay for advice.  Wealth management firms know they will struggle to meet projected revenue growth goals of 15% without client confidence in their advisory propositions.

To help Forum members identify the must-do’s (and don’t’s) in the client experience today, we launched a survey of more than 1000 high-net-worth clients working with an advisor.  More specifically, we tested over fifty client experience factors to determine their effect on client loyalty. Interestingly, we found that experience factors contribute to loyalty differently – some kill loyalty, some build loyalty, and some have no impact at all.

An analysis of these loyalty killers and builders reveals that a high-quality client experience today is a confidence-building experience, delivered through three key components: serving to demonstrate competence, tailoring to build trust, and teaching to enable confident decision-making. Delivering on each of these components achieves key emotional outcomes: clients think it is easy to do business with you, clients think you are looking out for their best interest, and clients think you are helping them progress toward their goals.

And those emotional outcomes lead to significant financial benefits for the firm. Clients who believe their firm delivers on the three components of a confidence-building client experience exhibit highly loyal behavior and generate twice as much revenue compared to clients who do not believe their firm meets the bar. Moving clients into a high loyalty zone not only positions firms to capture greater wallet share from these clients, but also results in high levels of client advocacy, leading to new client acquisition

Forum members, learn how leading firms deliver a confidence-building client experience in our new research, Building Loyalty through a High-Quality Client Experience.

The News: According to CEB’s Wallace Blankenbaker, wealth managers are under pressure to grow, and the path to growth is delivering a tailored and teaching-based client experience.

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Over 70% of clients rating their financial planning or annual review experience as excellent recommended their advisor in the past 12 months, compared to just 47% of clients in general. Yet currently 40% of clients rate their annual review as mediocre or worse, and in the last year only 47% of clients created or updated a financial plan at all.

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