Wma journal march 2014 clientexperience medium

WMA JOURNAL Working for the Investment Community & their Clients

CLIENT EXPERIENCE

Counting the cost of poor client experience Suitability, compliance and business growth are top of mind concerns for wealth management executives and Private Bankers, and those who track behavioural client research are increasingly concerned about client experience. More than ever before the quality, frequency, efficiency and relevance of all client interactions and communications are significantly impacting winning and retaining clients.

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ealth firms are concerned about client experience, and rightly so, because poor client experience leads to attrition and everyone in the business has to work harder just to stand still. The loss of a client with over three million dollars in assets costs the firm around $20,000 in lost revenues alone.

Add to that the lead time for acquiring a new client (typically eight weeks), requiring four or more meetings and many hours spent preparing presentations and proposals, with a relationship manager whose compensation is in the region of $600 per day, and it’s clear to see how replacement costs can easily escalate.

Speaking with industry analysts and wealth management firms on a daily basis, as I do, I have noted three key themes which recur on a regular basis. Each requires wealth management firm to re-examine the way they communicate and share information with clients if they are to remain competitive.

First, the majority of wealth management advisors spend most of their time on nonclient-facing work. Much of this time is spent preparing for client calls and meetings, preparing presentations and proposals and meeting compliance requirements, leaving less time to look for new business. Even relationship managers spend little more than 50% of their time on client-facing work, much of which is spent discussing valuations, reviewing progress and responding to enquiries previously submitted by email or phone.

Second, the average relationship manager is typically responsible for more than 100 client relationships and conducts less than 30 face-to-face meetings with clients and prospects a month. At best, they are able to reach less than a third of their clients in person on a monthly basis; some clients may not be seen for two months or more. Without a doubt wealth managers must be certain 6 WMA JOURNAL

they are communicating effectively with clients in-between meetings, in a way that suits clients’ preferences and lifestyles, to avoid dissatisfaction and attrition.

Third, the vast majority of advisors do not use technology to facilitate interactions with clients and prospects during meetings.

A very small percentage – 4% according to CEB TowerGroup – regularly or very often use tablet devices. This is despite the rapidly growing body of evidence from numerous sources that clients respond more favourably when reports and meeting packs are presented using tablet devices, which are more agile than static paper-based documents.

There are a number of initiatives that I believe wealth management firms should consider, to help address the issues raised.

numbers of ad hoc enquiries, as they arise.

According to Scorpio Consulting, high net worth clients typically use three mobile devices, spend 48 hours per week on the web (50/50 work and social) and 19-28 hours per week communicating digitally. Digital communication has become a way of life and clients have a growing requirement to use online and mobile tools when they interact with all service providers. They expect nothing less from their wealth manager.

There is now solid evidence to support the notion that web usage breeds client loyalty.

Scorpio found that the HNW clients who spend the most time on a wealth manager’s website are more likely to remain a client even if their advisor leaves the firm.

No-one is suggesting that electronic communications will ever replace face-toface meetings however, the more wealth managers empower clients to gain real time access to portfolio valuations, statements and other client communications, in between meetings, the more engaged they feel.

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Create more time for client-facing work Advisors and Client Services teams want to spend more time engaging with clients than preparing client communications, answering routine enquiries and manually ticking compliance boxes. Senior wealth management executives are now, as a matter of priority, approving expenditure that facilitates clientfacing work. Automated client reporting solutions eliminate 60-90% of the manpower required to prepare client communications, and they allow tens of thousands of reports to be run in a just a few hours, enabling client-facing professionals to spend more time ensuring client satisfaction, improving client experience, prospecting for new business and cross-selling to existing clients.

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Empower clients with 24/7 access Without a doubt wealth managers have insufficient time and manpower to communicate effectively across their entire client base and address increasing

Provide advisors with more versatile presentation tools HNW clients are increasingly tech-savvy in their own usage of mobile devices. They have a high expectation that advisors will arrive with a tablet device in their briefcase rather than a stack of paper reports under their arm.

In addition to saving paper and ink, advisors armed with tablets can access historical reports or analyse real-time figures online, as required, which is far more conducive to an effective and fully-informed discussion.

When wealth managers automate the client reporting and communications process using best practice methodologies, the effects ripple throughout the entire business. Have you reviewed the way you communicate and share information with clients in the last five years? If not, perhaps it’s time you did.

Alan Hamilton is CEO at Equipos T: +44 (0)207 933 8720 For more information visit www.equiposgroup.com www.thewma.co.uk

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