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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The News: Today, the booming interest in “next gen” programs has a strong business imperative as industry studies estimate that nearly 90% of assets will walk out the door when clients pass away.

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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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The News: According to a recent survey only one-half of small business owners use a wealth manager or financial advisor.

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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.

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.

Due to the changing profile of high-net-worth clients today, firms are struggling to pinpoint what clients value most in their relationship with a wealth management firm.

The VIP Forum’s survey of high-net-worth clients with greater than 5 million in investable assets in local currency reveals an opportunity to engage in deeper advisory relationships and generate referrals from this high-value segment.

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Many wealth management firms have invested significant time and effort to capitalize on the business owner referral opportuntiy sitting in the commercial businses line, only to discover their efforts aren’t paying off. Recent VIP Forum research reveals that consolidated relationships—those clients with both business and personal wealth management relationships at the same firm—aren’t producing the results firms expect—and that loyalty among these clients is far from healthy.

Firms should follow two crucial rules to build consolidated business owner loyalty:

1. DO Engage Business Owners in Personal Financial Advice
2. DON’T Overpromise and Underdeliver During the Sales Process

Forum members, read more to understand consolidated business owner loyalty drivers and how your firm can ensure that once it overcomes the barriers to winning referrals from the commercial bank, it doesn’t risk damaging relationships with those high-value clients.

Due to the changing profile of high-net-worth clients following the financial crisis, firms today struggle to pinpoint what clients value most in their relationship with a wealth management firm.

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In a recent survey of VIP Forum members, 63% of firms reported that business owners’ focus on business, not personal financial issues is the primary challenge in serving business owner clients.  However, The VIP Forum’s proprietary survey of wealthy business owners indicates that providing valuable advice on personal financial issues (e.g., retirement planning, asset allocation), not business issues, is the most significant driver of business owner loyalty.  This presents firms with a bit of a dilemma—business owners are difficult to engage in personal financial advice, yet this personal financial advice is essential to win their loyalty. Read More »