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Financial Planning > Behavioral Finance

Tiburon Panel Highlights Need for Improvement

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Tiburon Strategic Advisors, led by Chip Roame, wants its research to make executives and advisors think. But an informal discussion focusing on consumers, held during the mid-April Tiburon CEO Summit XIV in New York, had comments that might make some advisors cry.

But for advisors who can stomach the consumer panel’s observations, there was plenty to learn from. In a nutshell, the four consumers were uniformly unimpressed with the amount and quality of service provided. Key weaknesses were: a lack of proactive contact, poor communication and lack of follow-up. For the younger professionals in the group, a common complaint was that they felt their advisor was not paying attention to them despite having relationship balances of $100,000 to $250,000.

None felt they had the time for proper due diligence to seek out the appropriate financial advisor and were still with their current advisor out of inertia rather than out of satisfaction. “Unfortunately, it takes a financial catastrophe to switch providers,” one consumer shared.

Other take-away points for FAs from the consumers include: o All panelists desired contact that was proactive, not reactionary – although they received the opposite.o The younger panelists said they checked investments daily.o Looking to the future, panelists said they aim to build a retirement with someone they trust, though this does not seem to include their current providers. o All panelists felt that they are willing to pay more for outsized performance for at least a part of their portfolios. o Accordingly, fee sensitivity was not an issue for any of the panelists as long as returns were competitive.o There appears to be a huge opportunity for financial service providers to capture new relationships by providing the kind of service and experience that the panelists are seeking but have not found. o The firm that does so will have an opportunity for significant disruption in the category.

Roame agreed, saying that, “Unlike consumer goods, the financial services industry has never had a productive consumer research orientation. The objective here is to remind us all that these are our clients, and they have real life needs.”

Janet Levaux, MBA/MA., is the managing editor of Research; reach her at [email protected]


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