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Wealth Management Firms Focusing On Client Experience

Relationships with clients and the experience clients have with financial advisors and their companies have, of course, always been critical to success in wealth management. But since the financial crisis, firms have been ramping up their focus on all aspects of client interaction.

Relationships with clients and the experience clients have with financial advisors and their companies have, of course, always been critical to success in wealth management. But since the financial crisis, firms have been ramping up their focus on all aspects of client interaction.

Last fall, Atlantic Trust hired Logan Allin away from City National Bank’s wealth management division and created a new position for him: Head of Strategy and Client Experience. “We wanted to make sure we were ahead of the curve when it came to interacting with clients,” said Jack Markwalter, chairman and chief executive of Atlantic Trust, a division of Atlanta-based Invesco. “We saw that clients wanted to interact with us daily, not just monthly or quarterly anymore.”

As a result, Allin said he is overseeing an information overhaul that includes investing in technology to provide clients with “additional online and mobile capabilities” and to provide client service teams with new workstations to “facilitate their day-to-day workflow.”

Raymond James also wanted to “enhance the client-advisor relationship,” said Tim Killgoar, who took over the newly created position as director of client experience in July.

The firm is striving to improve its efforts “anywhere we touch the client,” Killgoar said, including client statements, web portals and synchronizing campaigns advisors use to inform clients about the firm’s retirement, tax planning and risk management services.

Raymond James is also emphasizing its “By Invitation Only” program for prospective clients with over $1.5 million in investable assets. The prospects are flown in from around the country to spend a day at the firm’s corporate headquarters in St. Petersburg, Florida, followed by an evening event and dinner. “We want to demonstrate what kind of support and expertise the local advisor had behind them in the home office,” Killgoar said.

More Specialization

The rise in firm-wide client relationship and client experience practices in advisory firms stem from an increasing focus on specialization, accord to Dan Inveen, principal and director of research at FA Insight in Tacoma, WA. “It’s part of a trend we’re seeing as firms become bigger and move toward specialization,” Inveen said. “It’s part of what you’re seeing with firms having a dedicated operations person, a chief financial officer and someone in charge of business development.”

Consultant Robert Ellis, principal of Fast Track Advisors of Homer, N.Y., said he believes the increased emphasis on client experience has been “amped up since mobile became big” and communications with clients moved beyond computers. “The PC doesn’t meet the needs of Generation Y,” Ellis said, “and the industry needs to understand how they do business.”

Whatever the catalyst, the new crop of client relationship practices “makes sense in a lot of ways,” said Bing Waldert, director at Boston-based research firm Cerulli Associates. “part of the great push and pull of the business is that while an advisor can be successful because he’s an entrepreneur with his individual style, it also means the client experience can be very different across the business. But because referrals are so important, clients want to do all they can to keep clients happy and turn them into advocates.”

That’s exactly what Tony Guernsey, Wilmington Trust’s chief client officer, says he want to do.
“I see my role as serving as the company’s advocate for clients, mentoring advisors and seeing how we can service clients and give them what they expect and nee,” Guernsey said.

Ideally, maintaining a successful account with a client should lead to three or four other relationships, he said. “A good advisor is like a good doctor who is a general practioner. He or she sees someone who has a problem, makes a diagnosis and sends them to a specialist. And if the problem is solved, they will tell others who also have a problem.”

Getting The Word Out

Guernsey said his priority for this year is making sure Wilmington wealth managers tell advisors to take advantage of the recently passed estate and gift tax law. “This is what clients need to know and will thank us for,” he said. “Advisors can’t wait because it will take a long to implement.”

Spreading the word about the new law will also be a main concern for Northern Trust, according to Charlie Mueller, a managing director in the Personal Financial Services division.
A cornerstone of Northern’s client experience practice has been the firm’s comprehensive client satisfaction survey, Mueller noted. And the most recent survey conducted last year showed that clients wanted more pro-active communication from Northern, especially about complex issues such as wealth transfer.

As a result, he said, “we really mobilized around the tax law. We stayed close to the discussion in Washington, and when we got clarity, we had a communications and outreach program in place to immediately contact advisors through conference calls and town hall meetings. The advisors were able to then able to reach out to their clients with knowledgeable information.”

Merrill Lynch’s client experience efforts over the past year have focused on allowing clients to access a wide range of Bank of America resources, ranging from consumer and small business lending to investment banking to global markets. “We want clients to be able to access the entire organization the same way they can access all of our wealth management services through their specialist,” said Michael Sullivan, head of global client coverage.
More than 800 banking and credit specialists are working with advisors, Sullivan said, to help them deliver holistic advice to clients about their entire financial picture.

Independent Firms Also Paying Attention

Independent firms are also paying close attention to client relationships. The value of client experience officers, for example, was on the agenda at a meeting in Phoenix yesterday of several large advisory firms who work with Fidelity. For Sand Hill Global Advisors of Palo Alto, Calif., one of the firms attending the meeting, the financial crisis served as a catalyst to take a closer look at how clients were interacting with the firm and determine “where the losses were occurring,” said chief executive Jane Williams.

As a result of a best practices client survey, Williams said, Sand Hill found out that clients wanted more involvement from principals of the firm. “They said they felt disconnected from the people they used to know, and as a direct result of the feedback principals will contribute to discussions with clients. They don’t expect us to get involved in every detail, but we can stand back and talk more globally about big picture stuff.”

Role of Social Media

To date, most wealth management firms have shied away from fully embracing social media as part of their client outreach efforts.

“We’re taking a wait-and-see approach,” said Raymond James’ Killgoar. “We’re discussing it in a steering committee but there are also regulatory concerns.”

Wilmington Trust’s Guernsey said Facebook and Twitter pose a lot of security and confidentiality problems. “Confidentiality is our most treasured asset,” he said, “and it’s something we can’t put in jeopardy.”

But some industry observers think wealth management are being too cautious and point to firms like online brokerage TradeKing, which has embraced social media with blogs, tweets, online communities and support groups.

TradeKing chairman and chief executive Don Montanaro claims the firm’s approach has “zero security risk. No client’s information is ever shared unless they want it to be shared.”

What’s more, Montanaro thinks more traditional advisory firms are missing the boat by not using social media.

“If they don’t embrace it they will gradually lose touch with their clients,” he said.”They should not be afraid of technology. They think it will separate them from their clients but technology can be used to enhance and deepen relationships and provide better support to a larger number of clients.”

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