Being a good advisor is not enough for high-net-worth investors—they want their advisors to be great, according to a study by Independent Advisor Solutions by SEI and the Financial Planning Association.
That means having personalized services and building an exceptional overall client experience, as well as providing good returns, according to the report. Ranked just as high by clients are trust and transparency. These factors are the keys to retaining particular clients, SEI said.
“High-net-worth clients expect exceptional client experiences in all facets of their lives. Luxury hospitality and retail brands, as well as the concierge physician sector, often deliver a superior, personal experience, helping to set the service standard in their respective industries," said John Anderson, managing director and head of practice management solutions at Independent Advisor Solutions. “While technology and investment performance contribute to overall client satisfaction, our research shows that fostering trust and personalizing the investor experience can help advisors consistently meet, or exceed, clients' expectations.”
Despite their demanding standards, 85 percent of 957 people with $1 million to $5 million in investable assets said they are very satisfied or satisfied with their primary financial advisor relationship. When asked what the most important reasons for their satisfaction are, clients cited the overall relationship, trustworthiness and honesty, and investment performance.
In spite of the overall satisfaction levels, only 26 percent of high-net-worth investors said they are getting enough information from their advisors, and just 44 percent trust their advisors enough to take their guidance at face value.
Advisors seem to know how much trustworthiness and dependability matter to clients. Ninety-one percent said their clients would rank trust and transparency as important. “These findings uncover that trust, rooted in tailored, highly personalized service, can be the currency of success for advisors serving the often-elusive HNW market segment,” SEI said. The survey included 375 advisors.
“Advisors should consider workflows, client journey maps and investor personas to solidify the client experience," said Anderson. ”Clients engage at various points in the financial planning process, and advisors should make each of those engagements meaningful, from the initial transaction to multigenerational planning.”
SEI offered some counsel to advisors who want to develop a good relationship with high-net-worth clients. Advisors need to have a deep understanding of the clients’ feelings and concerns, and not just know their financial situation. Calls have to be returned as soon as possible and there must be zero tolerance for errors, as well as complete follow through on any agreed upon action.
“Advisors need to ask clients what they expect up front,” the study said. “They should constantly look for ways to reduce sources of frustration and capitalize on opportunities to improve the client experience. To be innovative and offer the broadest solution suite possible, advisors should consider outsourcing non-core activities, so they can spend more time on personalization and building trust,” SEI said.
In order to respond appropriately to each client, advisors need to narrowly segment clients. Advisors should specifically define their niche market, as well as hone the ability to explain their value proposition in one or two sentences, SEI said.