How the Client Experience Helps Firms Retain Clients

Investors often change advisors because they find another advisor that better understands and aligns advice with their overall financial goals.

This comes as a surprise to many as it suggests that despite a firms’ many offerings and advisor work, the client did not have an experience that would suggest the firm was meeting their expectations. Everything probably seemed to be working properly—until the client fired the advisor.

Relying on service models centered on portfolio management is not enough. A mismatch of expectations between the advisor and client may also cause friction. Traditionally, firms utilized customer satisfaction surveys to match service offerings to consumer expectations. Recently, Cerulli Associates released research that showed 80% of clients are satisfied with their advisor¹. The top three drivers of satisfaction were:

1. Trustworthiness, honesty and dependability
2. Overall relationship
3. Knowledge and quality of advice

How can firms best retain clients? Develop strong relationships; deliver comprehensive, quality advice; and employ competent and trustworthy advisors. However, most critical is delivering a stellar customer experience.

Measure — But Look Beyond — Customer Satisfaction Scores

Most companies measure customer satisfaction on an ongoing basis to monitor trends year-over year. However, just tracking customer satisfaction does not tell a firm how to achieve it. As one observer noted in Harvard Business Review:

Customer satisfaction is essentially the culmination of a series of customer experiences, or, one could say, the net result of the good ones minus the bad ones. It occurs when the gap between customer’s expectations and their subsequent experiences has been closed.²

To look beyond low customer satisfaction scores and better understand how to achieve higher scores, a company must break down all of the interactions a customer experiences with the company. For firms offering financial planning, this can be especially tedious given the collaborative nature of the planning process. The analysis is a worthwhile investment as it is more expensive to obtain new clients than keep existing ones.

Take a Holistic View of the Client’s Experience

In the past, the advisor was at the beginning, middle and end of a client experience. Today, clients interact with a firm beyond their advisor relationship. Firms now need to measure not only the client experience with the advisor but also take a more holistic view of the client engagement.

One tool employed by firms is Journey Mapping. This tool zooms out to look at how and when a customer works with a company. For financial planning firms, this starts when a customer first learns about a firm’s financial planning services, to engaging with their website and then with a representative to learn how to become a client of the firm.

Technology is a critical component of the client experience. For example, a client might be unhappy if they needed to engage with their advisor and wait for an analysis and appointment instead of using an online tool to see if they are on track to meet their retirement goals. Successful firms adapt their planning experience to accommodate clients who prefer to have their advice delivered from their advisor as well as clients who would rather access their financial planning advice digitally.

How to Embrace Journey Mapping

Journey mapping the client experience shows a true dedication to serving clients well in the areas they value. The first step is acknowledging and accepting the current state. The current state may not be intentional, but a result of evolving customer expectations, industry regulations as well as firm operations and technology offerings. If starting from scratch, start mapping how the client should first engage with the firm and how the journey should proceed from that initial engagement.

The focus on the client experience is described as “meeting the client where they are.” Each client is unique — some want to handle most or all advice without an advisor while others want to delegate most of the responsibility to an advisor.

The next step begins with the question: what are the core experiences that clients have in their interactions with the firm? This could be how a prospect learns about the firm, through initial engagement with an advisor and ongoing service and advice received.

When learning about and initially engaging with a firm, does the website offer comprehensive information and is it easily described? Is it flexible so that a prospect can find not only products and services, but also the processes followed around financial planning and periodic reviews? Can they find the firm’s approach and philosophy, the quality and training of advisors, as well as transparency around pricing and potential conflicts of interest?

Many digital advice firms are successfully acquiring new clients by allowing prospects to try financial planning tools before sharing personal information with the firm. Prospects are more likely to seek advice after a positive experience with an easy-to-use financial assessment tool.

Once the prospect becomes a client, creating the ideal experience becomes more challenging. Client goals may change or their desire for information and control may increase or decrease. The firm must equip their advisors with the tools and knowledge to identify key elements missing in the client experience. The next step is to make sure those elements are frictionless from the client’s perspective. Example elements can include the use of Zoom, how data and paperwork are shared, or easily make “what if” changes to a plan online to see the possible effects.

The focus on the client experience is described as “meeting the client where they are.” Each client is unique—some want to handle most or all advice without an advisor while others want to delegate most of the responsibility to an advisor. Others want ongoing assistance and some want advice during life events (e.g. retirement). Overall, firms need to move away from a “cookie cutter approach” when it comes to financial planning and advice.

Many clients measure their experience based on how well the advisor/firm is delivering on their desired outcomes. The following questions shed more light on how clients measure firm and advisor performance:

• Do you understand my goals, objectives and how I think about risk?
• Do you understand how I think about money and what I need to know to make financial decisions?
• Do you make it easy for me to get information and make changes?
• Has your advice kept me on track to reach my goals and contributed to my financial confidence?
• Do I trust that you are working in my best interest?
• Does your advice just focus on investment goals or does it take into account my whole financial life?

Clients may not directly ask these questions, but many will fire their advisor if they are not addressed.

Identifying all the ways prospective and current clients interact with a firm may be painstaking, but it will allow firms to make appropriate changes — ultimately retaining more clients.

Prioritize Training and Designations

If advisors are experts in one area but weak in others, there can be issues as clients expect a holistic view and demand advice on all parts of their financial life. They expect advisors to ask intelligent questions and provide appropriate solutions.

Training advisors to meet core client expectations and needs should be a top priority for firms. Advisors and front-line support should be trained on foundational, communication and counseling skills.

Training advisors to meet core client expectations and needs should be a top priority for firms. Advisors and front-line support should be trained on foundational, communication and counseling skills. More curriculum being developed in the field of psychology of financial planning will be critical for advisors going forward. This will help advisors know how to best communicate with and understand client’s fears, hopes dreams and expectations.

Designations also help advisors stand out. However, not all are the same. For example, the CFP® certification is recognized by the public as having the highest standards and requires certificants to act in their clients best interest. Additionally, out of the 200+ designations on FINRA’s list of financial advisor professional designations only eight are accredited. One of those is CFP® certification. Firms will need to support advisors pursuing certifications that meet more rigorous criteria.

Training and designations can help maintain client satisfaction, improve retention and ultimately lead to better client outcomes.

An Opportunity to Reset

Clients have more financial planning and advice choices than ever before. The net result of the interactions they have with a firm and advisor will ultimately determine whether their expectations are met and whether the firm/advisor will be retained or replaced.

Now is a perfect time to be intentional around the client experience. As more firms expand their offerings into more holistic advice, the customer experience has broadened and can no longer be defined by portfolio performance or quarterly meetings in an advisor’s office. Firms that will succeed in the future will conduct a deep examination of their client experiences and make the necessary improvements—from processes to technology, communication, support or an advisor’s knowledge and skills.

1. U.S. Retail Investor Advice Relationships, Cerulli, 2020
2. Understanding Customer Experience, Harvard Business Review, February 2007.

Interested in discussing how CFP Board can support your firm’s certification efforts? Contact CorporateRelations@cfpboard.org.