It’s coming up on a year since the COVID-19 pandemic ushered in significant and immediate disruption to the wealth management industry. Advisors, who had spent decades sounding equivocal on the importance of technology to their client relationships, have been forced to readily embrace remote work and digital communications. Most firms have benefited from this shift in approach, allowing them to be close at hand to advise and support clients through management of the pandemic and its impact on retirement and financial plans.
This sort of client-centricity – adapting quickly to changing circumstances – is requisite to a strong financial recovery for wealth management firms, acting as a competitive advantage in uncertain market conditions. While there is no doubt that some firms have great client-focused field staff, this is not the same as having a client-centric culture.
Our Aon proprietary analysis suggests that firms will need to go further than before to embed client-centricity into the wider organizational culture in order to effectively meet the recovery challenge we will face in 2021.
Traditional Approaches to Client Feedback Aren’t Effective
Most wealth managers enthusiastically declare that they are highly client-centric, pointing to the availability of premium services, exclusive events, longstanding loyalty and high client service levels as evidence of their commitment.
This, however, is a narrow definition of customer-centricity. The other angle, adopted by technology and consumer-facing brands, focuses on the degree to which clients are treated as stakeholders in the business, whose feedback and satisfaction are not just interesting, but critical to every aspect of business decision-making.
High client service levels could even be evidence of poor client-centricity if those high value services are under-appreciated by clients or crowding out other more valued elements of the client experience.
It is here that wealth managers fall short. Most still operate in a 1960s enterprise model – a time when gathering client feedback was labor intensive and expensive, and disseminating that feedback to support day-to-day decision-making was difficult. Today, the cost of gathering online feedback from clients is low and our ability to digest and disseminate insight is high. Yet, few front-line managers receive real-time client feedback other than that which they themselves solicit.
As a result, valuable information isn’t incorporated into performance management, talent development or pay processes. Most often, it does not even make it back to the front-line staff who are best placed to act on it.
HR is Usually the Last to Know
An unstructured approach that fails to disseminate client feedback to HR hinders both profitability and employee engagement. HR leaders rarely have access to client feedback in any format, making it challenging for the talent development organization to recruit, retain, develop and reward the very people that are necessary to deliver on the client promise.
Top-performing advisors want to work at firms that excel at serving their clients. Therefore, client focus is a crucial component of the employee value proposition. In other words, creating client-centric performance management and pay processes is critical for building employee engagement.
For wealth managers who are serious about increasing client-centricity across the organization, here are five questions you should ask:
Do you regularly collect client satisfaction feedback from all your clients?
The most effective programs don’t lose momentum. From monthly pulse surveys to biannual studies, wealth firms should track the client impact of core initiatives and keep listening for new opportunities to serve clients’ unmet needs to drive growth. They should focus on centralizing the research process to avoid cherry-picking of highly satisfied clients in the respondent base.
Are there benchmark comparisons with peer firms?
The volume of insightful data coming back from client feedback programs could, in theory, spur hundreds of initiatives. This is where a benchmark against wealth management peers can be most powerful, revealing urgent priorities where the firm lags competitors and opportunities for differentiation.
How widely is feedback shared?
Results that are only seen by marketing or insights teams are a wasted opportunity. A more commercially-oriented approach would ensure that real-time insights are shared with field staff to inform their client management. It’s also crucial to share these details with HR, enabling the team to draw on findings to inform talent strategies and incentive planning.
Do client feedback results influence compensation and promotion decisions?
Compensation and promotion decisions are two of the most powerful levers managers have for shaping the organization’s culture. If these decisions are made in isolation of external and internal client satisfaction feedback, not only are you missing an opportunity to build a client-centric culture, but it sends a message that financial results can be achieved at the expense of clients. That path, which unfortunately is well trodden, leads to client attrition and compliance failures.
Are client priorities built into role objectives and regularly updated?
Client-centricity is cultural for an organization. Management of the insight program may sit with one department, but the whole business must own the results to maximize impact.
A client-focused organization isn’t about doing whatever clients want. In fact, such an approach almost guarantees you will do nothing well. Instead, the objective is to understand what is most important to clients and focus efforts on excelling at addressing those priorities by stripping away extraneous activity.
Firms that can treat their clients as stakeholders and keep them involved as new, strategic initiatives are integrated into the business, are best placed to reap the eventual rewards.