Advisors Not ‘Walking the Talk’ on Client Service

Technology helping and hindering client service efforts

SEI compares advisory firms’ client service to exercise: Advisors know they need to do better, but it’s easy to get off track. Although 96% of respondents said a firm’s level of client service was a differentiator, just 9% say it is integral to a firm’s mission.

SEI surveyed senior managers at investment management firms, institutional consultants and institutional investor organizations for the white paper, “Client Service: What It Takes to Walk the Talk,” to determine what advisors are currently doing about client service and where they can improve.

Almost two-thirds of investment consultants and 63% of investors said they were unhappy with client service levels, the paper found.

The big problem, according to SEI, is that firms don’t know what clients want regarding service. More than 80% of investors said advisory firms didn’t understand what investors want and 63% said they didn’t understand their needs. However, only 23% of managers agreed that advisor firms don’t fully understand client needs.

There wass little consensus between respondents about the function of client service. Among investors, giving the clients a voice was the most important function, followed by responding to clients. Managers named being responsive as the most important function, followed by relationship building. Interestingly, consultants placed a much higher value on providing transparency (20%) than either investors (6%) or managers (5%).

Another interesting divergence is in respondents’ view of cross-selling. Forty-three percent of managers and 45% of consultants said the “primary thrust” of client services is cross-selling, compared with 31% of investors.

Half of investment managers said senior management needed to be supportive of client service efforts and 60% of investment organizations said firms weren’t devoting enough resources to client services to be effective. “To be effective, senior management support for client service must be expressed both philosophically and structurally,” according to the white paper. “That is, it must be carried through in compensation structures that provide incentives for client-centric service, rather than just cross-selling, and in budgeting adequately for client service staff, training, technology and outreach.”

Surprisingly, more than a third of respondents said technology has not helped enhance client service efforts. In fact, some of the benefits of technology, like more investor access to data, could be responsible for some of the drawbacks, like lower levels of intimacy and understanding between advisors and clients.

About a third of respondents said technology had “generally helped address client needs” and 38% said it was a “critical link” between clients and advisory firms. Although only 9% of respondents called technology a “barrier” between clients and advisors or said it caused confusion among clients, respondents agreed that it had changed client expectations.

“Overall, our respondents said the most significant change brought by technology was a ratcheting up of clients’ expectations—that is, expecting more and wanting it more rapidly, in response to requests,” according to the paper.

SEI asked respondents to describe what they consider superior client service and identified four common themes among responses: consistency, timely responses to client requests, understanding a variety of topics and having the right people for the job.

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