How sticky are your clients? Cementing client loyalty as well as income.

Financial Advisory

25 June 2019

Advisory DistributorsClientCustomerExperienceFinancial AdvisoryYour clients


While clients have always had the ability to vote with their feet, or with their wallets, they now have more power to influence not only what they buy, but also what others buy.

They have become both critics and creators, demanding a more personalised service and expecting to be given the opportunity to shape the products and services they consume.

As a result, a gap is emerging between clients’ expectations and the ability of businesses to meet them. Businesses are struggling to keep pace with an ever more fickle client.

In this session we'll discuss how advisers can start to close this gap. Start by thinking do you offer your clients value add services?

How holistic is your approach, do you look after “all” your clients’ money?

Do you offer help with international payments if clients are buying/investing in an overseas asset, transferring salary or paying for overseas school/college fees? What about cash management and providing interest on funds on account?

Can we learn from other industries?

Points discussed and debated:

What do clients need and want from their financial adviser?

  • Strength of client relationship and trust remains central to retaining client wealth
  • Accessibility and expertise are deemed to be important in client’s relationship with an adviser
  • Brand is not deemed as important for most advisory businesses – individual advisers hold the brand loyalty card!
  • Businesses are segmenting by economic value and future profitability – low value clients receiving lighter touch service
  • Focus is on delivering core services well – ancillary services seen as a distraction and less valuable.
  • Examples of ancillary services adding value – document management, wills, legal services
  • Outsourcing of services seen as a risk to existing relationship
  • Transactional services are providing opportunity to recruit and develop new advisers
  • Next generation clients are less loyal to brand/existing adviser relationships
  • Possible to deliver add value services where complimentary to core services – currency exchange maybe an add value service
  • Example – HNW clients and clients who work abroad/with property abroad.
  • Clients value the technical knowledge and how this applied to their circumstances – bespoke advice!

What do client’s value most (and least) from their financial adviser?

  • Most valued – bespoke advice, relationship management, positive returns, investment strategy (headline performance)
  • Least valued – Investment strategy (details behind performance),
  • Increasingly important – Brand and values, ethical and environmental strategy, digital services

Is it a sign of weakness to outsource/insource some services?

  • Feedback from group was that there was a preference to insource where possible
  • Opportunity to outsource was debated – provides opportunity to reduce costs and risk and a way of increasing value

What are the key challenges facing advisers?

  • MIFID II requirements – monitoring and reporting of on-going service delivery
  • Increasing scrutiny of charges and costs as a result of regulation changes – price comparison is starting to bite!

What are the significant threats?

  • Technology adoption – high value clients going direct where firms not developing digital services
  • Ageing client demographic – attracting and retaining next generation clients will key
  • Risk of under and over delivery of service without segmentation and data

Actions and Possible Solutions

  • Engage and take feedback from clients – what services do they value most?
  • Client forums – feedback sessions to improve services
  • Evaluation of business performance/cost/time – what is working and adding value to the bottom line
  • Review of additional services and introduce develop multi-channel services where adding value to clients

Conclusions and solutions:

  • They must consider carefully who are the most appropriate people to assume responsibility in each area
  • Ensure each senior manager has sufficient visibility, MI and authority to discharge their duty in that area
  • Develop training plans for all staff to understand their conduct responsibilities
  • Start with a detailed organisation chart and a “root & branch” analysis of the current business structure and what is required in the future
  • Review business model – is it appropriate and aligned with governance structures
  • If running an Investment Committee defines terms of reference, roles and selection processes
  • Consider if running your own Central Investment Proposition is appropriate
  • Conduct a review of assigned process & map
  • Think about your organisation change now being an accountability quest
  • Ensure the SM has sufficient visibility, M.I. and authority to discharge their duty in the area
  • Ensure certification processes are in place for annual processes and new starters

Expert: Dan Russel, Simplybiz