From the February 2006 issue of Boomer Market Advisor • Subscribe!

The importance of superior service


Discussions of customer service evoke images of polyester uniforms, minimum wage and dead-end jobs that require nametags. And the tales of bad customer service -- on any rung of the professional ladder -- often outlive more positive encounters.

One could argue that things have grown worse as technology advances. We live and work in a marketplace that continues to build more space between personal interactions, whether it's recorded messages that answer the phones or an entire customer service department located in a different time zone.

As a result, superior customer service is often overlooked. For most, it's about providing just enough service so as not to completely alienate the customer.

But it's a different story for financial advisors, one that's being rewritten. Eager investors continue to flood the market, giving rise to a new wave of financial advisors who are more than happy to take on disgruntled clients.

Boomers are discriminating customers. They have higher expectations than their predecessors and less patience. They also demand more information and more control of their portfolios.

Jack May, director of advisor solutions with SEI Investments, says boomer demands are simple.

"The bottom line for the boomers is clear," he says. "'It's all about me and my life -- If you help me to clarify and gain control of the bigger picture of my life, you'll earn my gratitude, my loyalty and my business.'"

The good news is that the market continues to grow. The bad news? So is the competition.

According NFO World Group, roughly 80 percent of wealthy boomers have at least four financial providers.

"Representation, education, options and control: these are what boomers crave," May says. "Yet, the industry is not living up to the task and this is evident in research. Today's investors are not satisfied with the level of service they are receiving from their advisors. On average, boomers see no differentiation in the financial services industry. They want independent and objective advice centered around their life, family and community aspirations, but can't seem find it."

For boomer advisors, superior customer service translates into lower turnover, better referrals and lasting relationships. But there is more to it than making it to appointments on time and remembering clients' names.

"We see the interaction between advisors and clients changing from a transaction-oriented exchange into a consumer-driven relationship," Keith Washington, vice president of client services at Financial Profiles Inc. in Carlsbad, Calif. "Consumers are pursuing a more collaborative relationship with their advisors."

Crunching the numbers and developing a comprehensive financial plan are essentially commoditized, forcing more advisors to compete on superior service. San Diego-based Scott Wolters, chief financial planner at WH&P Planning Inc., says it usually revolves around attention to the little things. For example, he keeps a database of his clients' favorite drinks so that they can be ready when they visit his office. He also ensures that whenever his office sends flowers to mark a client's special occasion, everyone on staff signs the card.

For May, it's a bit more substantial, and starts with a clear understanding of the client's expectations. Otherwise, he says, advisors' efforts are little more than shots in the dark. "A lot of advisors are off-base in how they think clients perceive their value," he says. "Most [believe] that, if asked, a client would say investment performance was most important, something that just isn't true when it comes to service. Obviously, it's a significant factor in their satisfaction levels, but it's not the end-all, be-all."

May suggests spending money on an effective research tool that accurately uncovers client expectations.

"Service is founded on the one-on-one relationship an advisor develops with the client - by advising, managing and executing on life issues (not just financial)," he says. "Yet many independent advisors don't have the time or economies of scale to deliver the personal attention necessary to develop that level of intimacy, a level that clients expect and demand."

Janelle M. Barlow, an executive with Branded Customer Service in Las Vegas, says that customer service should match the advisor's business model.

"Every financial advisor must have an idea how they will get new clients, what they will offer, and how they will serve them. And how they will set up a financial model so everyone benefits," Barlow says. "It's at this point that the individual financial advisor should decide what type of promise they want to make to their customer: tough love regarding financial issues; lots of personal attention; smart brain figuring out the financial market, whatever."

Once that model is identified, the level and type of service follows.

"For example, the 'smart brain figuring out the financial market' perhaps should be so personally available to his or her clients as the 'lots of personal attention' financial advisor. For the financial advisor who works for a financial company, they must, by definition, subsume their approach to match the brand promise and marketing messages that the parent company is making to the public," Barlow says.

Clearly, customer service can be about more than a firm handshake and a cold drink in a fancy conference room. It's about committing to client satisfaction as much as they are committed to your advice.

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