Client satisfaction is very much on the minds of many advisors. In my firm's recent advisor survey, we learned that 71.4% of RIAs are "very or extremely concerned" about boosting client satisfaction. In fact, this concern was one of the most important ones cited by RIAs in our research - the only two concerns deemed more important were delivering high-quality products and services, and significantly growing assets. (See the chart on the next page.)
There are, of course, numerous reasons for making client satisfaction a priority. We've long known, for example, that satisfaction breeds deep loyalty in clients. That loyalty, in turn, provides you with very tangible business benefits: Highly loyal clients gave their advisors far more assets on average than clients who were less satisfied, researchers have found. And the most loyal clients made nearly 12 introductions a year, on average, to new prospective clients, while less-satisfied clients made just 2.1 introductions on average.
WHAT MATTERS MOST
Even though we find that while many advisors are concerned with boosting satisfaction among their clients, they often don't know what to do to make it happen. To ensure thoroughly satisfied clients, first understand exactly what clients really need. The base of any great advisor-client relationship is the level of relationship satisfaction a client feels. The way clients feel about their overall relationship with you is more important than even the level of satisfaction they feel about your service and your investment performance.
In general, if clients are unhappy with short-term investment performance but pleased with their relationship with you, they'll likely remain with you. A strong relationship will likewise help smooth out administrative bumps.
Relationship satisfaction requires strong, ongoing personal interactions between you and your clients. There are several drivers of high levels of client relationship satisfaction:
1. Hustle. The key to high marks here is reliability. When you make a promise, keep it, and keep it on time. Set a goal of providing perfect service, with plenty of attention to details. Researchers have found that nearly two-thirds of very satisfied clients see their advisors as being perfectionists, compared with less than 7% of very dissatisfied clients.
2. Avoid surprises. While clients dislike service failures, they dislike unpleasant surprises even more, making it your job to prevent them as much as possible. To rate well with clients in this area, actively solicit opinions and perceptions - including negative ones - from your clients. While more than half (55.3%) of very satisfied clients felt their advisors wanted to hear their complaints and feedback, a mere 6.5% of very dissatisfied clients felt this way.
Not only will this help you spot and head off major problems, it will clearly demonstrate your concern about service to your clients. In addition, whenever an external disaster occurs, you will do well to get in touch immediately with clients.
3. Warmth. Good manners are not enough: Virtually all clients, satisfied and dissatisfied, believe their advisors are generally courteous. Affluent clients are looking for true emotional warmth. When asked if their advisors are warm, 64.3% of highly satisfied clients said yes, while only one-quarter of dissatisfied clients had this response. Keep this in mind as you make your hiring decisions. If your staff needs help in this area (or you do), consider classes to help improve interpersonal skills.
4. Active communication. Your clients want to be kept informed not just about their portfolios and financial progress, but also about important changes at your firm and with your staff. Don't let your clients hear about personnel changes from competing advisors - this is the type of negative surprise you want to avoid.
Very satisfied clients scored their advisors well in this area, with 77.9% believing their advisors provide information in a timely manner; 75.3% acknowledge their advisors' efforts to give regular briefings. As can be expected, very dissatisfied clients scored their advisors poorly, with just 19.4% feeling that they received timely information.
