A client’s satisfaction with a
financial adviser can be judged by the length of time that client
retains his or her services.
This common perception could not be
further from reality, reveals a study by US investment management
and consulting firm Genworth Financial Wealth Management (GFWM), a
unit of insurer Genworth Financial.
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“Many financial advisors believe
that if they have had a client for 12-plus years, then that means
their clients are satisfied. That just isn’t the case,” said
Gurinder Ahluwalia, president of GFWM.
“Length of client retention is not
directly correlated to being satisfied, and advisers just can’t get
too comfortable.”
Ahluwalia’s conclusion was based on
a study conducted by GFWM in March. The study’s objective was to
assess client attitudes toward financial advisers in the wake of
the economic crisis.
Far from an adviser’s length of
association with a client being the most important factor
influencing satisfaction, GFWM found that the most important
consideration today is an adviser’s ability to proactively
communicate and make informed investment changes.
“Last year’s financial meltdown
showed we need new ways to approach investing and risk and better
ways to communicate with clients,” said Ahluwalia.
“Advisers who can talk in depth
with clients about what is happening in the market and develop
flexible strategies are more likely to have satisfied and loyal
clients.”
In its study, GFWM found that 64%
of clients who reported that an adviser helps them understand
market impact were extremely satisfied while 73% of those who
reported that an adviser does not help them understand the market
impact are dissatisfied.
The level of client satisfaction
also has a significant bearing on the responsibility they are
prepared to permit an adviser to assume.
For example, of clients who
reported being ‘extremely satisfied with an adviser’, 35% had more
than half of their assets managed by the adviser.
Contrasting with this, of clients who reported not being
‘extremely satisfied’ with an adviser, 45% had less than a quarter
of their assets managed by the adviser.
