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“The best advertising and sales are done by satisfied clients.” That sentiment is used across industries all over the world, including in the financial industry. Client satisfaction is something that is a key component of business success for any financial firm. There has been a push in the industry towards ensuring a positive client experience, and ultimately a satisfied client. Whose clients are the most satisfied? What drives their satisfaction?
Spectrem Group recently conducted research with wealthy investors regarding their relationships with advisors, frequency of referrals, and satisfaction levels. There was some very positive news in that around 90 percent of wealthy investors feel their advisor is excellent or very good. Investors have the same attitude towards their advisor’s knowledge and expertise. Over ninety percent of clients feel their advisor’s knowledge and expertise is excellent or very good.
When looking at their primary advisor’s performance, that is where things start to differ. Over 90 percent of clients who work with Full-Service Brokers, Independent Financial Planners, and Investment Managers feel their advisor’s performance is excellent or very good. Only 83 percent of those wealthy investors who work with an Independent Investment Advisor (RIA) feel that way.
This brings up the question if all these clients prioritize the same things when selecting and retaining their primary financial advisor. When Spectrem Group asked wealthy investors what the number one variable was in choosing and retaining their primary financial advisor, the answer selected by a quarter of wealthy investors was for the advisor to have a strong investment track record. Twenty percent of wealthy investors felt the number one variable was for the advisor to be genuinely interested in their needs. All other variables were identified by less than 10 percent of wealthy investors. This sentiment is mirrored among those wealthy investors who use a Full-Service Broker, an Independent Financial Planner, and an Investment Manager. Those investors who use an Independent Investment Advisor (RIA) has the largest percentage of wealthy investors selecting the most important variable as when the advisor is genuinely interested in their needs.
There remains an opportunity for every advisor type to improve their interactions in order to increase satisfaction levels, which may lead to increased referrals. Understanding and consistently working to improve client satisfaction will be the key to future business success.