Clients Satisfied With Advisors Before Volatility. But What About Now?

Most clients were happy with their advisors while the market was stable, according to a consumer study released Tuesday, but what happens now that investors are struggling with volatility?

“The true test of satisfaction comes as the stock market declines and financial advisors have difficulty justifying their fees and holding on to clients,” said David VanAmburg, managing director of the American Customer Satisfaction Index, in a statement. “The recent market plunges should come as a warning sign for any financial advisors who aren’t fighting to improve their customer experience.”

The recently released survey, “Financial Advisors Report 2017,” was sponsored by the index, a customer satisfaction rating covering more than 40 industries, and Exponential ETFs, an exchange-traded fund issuer. Both firms are based in Ann Arbor, Mich.

Kevin Quigg, chief strategist at Exponential ETFs, said that whether financial advisory clients will maintain their satisfaction levels is something unknowable right now. The firm will monitor the satisfaction levels during 2018 and issue a second report, he said.

The report was based on responses obtained through 1,473 customer surveys collected during the fourth quarter of 2017, before volatility hit the markets.

The results were broken out for independent fee-based advisors and advisors at LPL Financial, Charles Schwab, Fidelity, Merrill Lynch, Morgan Stanley, Raymond James, Wells Fargo and UBS. All scores ranged between 79 and 83, according to the index, which is higher than the satisfaction scores for other industries.

The scores were higher for the financial industry than for other industries because financial services is a highly competitive business where advisors have to differentiate themselves—and please customers—in order to survive, said Quigg.
  
Survey participants were asked such things as how easy it is to open an account, asked about the operations of call centers and websites, and asked about the trust and confidence customers have in their advisors. They were also asked about the availability of mobile apps and their ease of use, which is where some advisors fall behind, said Quigg.

“The availability of mobile apps that allow customers to manage their financial accounts at any time they want and from any place they want is the area where financial advisors have the greatest room for improvement,” said Quigg. It will be one of the ways advisors will differentiate themselves this year.