Two factors contribute to an honest assessment of client service staff. (Illustration: © Stuart Kinlough/Ikon Images/Corbis)

We recently received an email from an advisor asking how we assess the performance of client service staff in independent advisory firms. It’s an excellent question and one that many owner-advisors are asking these days. While we’ve been building client service departments in our client firms since 2007, many firms have only recently added dedicated client service staff and are still trying to sort out how to train and monitor them effectively.

As you know, lead and senior advisors could work with significantly more clients and meet with more client prospects if they didn’t have to talk with their clients every time they had an issue that could be handled at a clerical level. Many advisory firms solve this problem by having junior advisors deal with these issues or clerical people handle them. Unfortunately, that gave junior advisors less time to take more complex advisory issues off the owner’s desk or meant that clients were being helped—or not—by untrained employees. As you might guess, neither is an optimal solution.

We found that a far better solution is to hire, train and support dedicated client service staffers whose full time jobs are handling all client issues that don’t require the expertise of an advisor. They bring the issues they can’t handle to the attention of an advisor and monitor the resolution of that issue. We find that client service departments not only leverage advisors so they can generate more revenues than their cost, but also dramatically increase both the quality of a firm’s client experience and its volume of referrals.

As the above advisor question points out, adding client service departments does create some challenges for advisory firms. However, how to assess client service performance should be the last of those challenges that firms address. If the other challenges are handled successfully, it can be resolved relatively easily.

The first issue in creating a successful client service department is for owner-advisors to accept client service as an essential element for the firm’s success. If they aren’t viewed as critical, client services won’t deliver the desired results. As I’ve written before (see “The Death of the Rainmaker,” Investment Advisor, July 2014), many owner-advisors have difficulty embracing the client service solution and successfully integrating those staffers into their firms. From that article: “The first step is changing a firm’s (and owner’s) focus from bringing in new clients to delivering killer client service. We’re not talking about lip service here. The ‘client service people’ need to be viewed as the ‘heart of the house,’ the key to the success of the firm. They will have the most interaction with the clients—and much of the clients’ impression of the firm will come from those interactions.”

Unfortunately, even owner-advisors who recognize the need for a client service department often see client service people as second class. Consequently, they don’t hire enough client service people, they don’t compensate them well and they overwork them with too many clients and clerical work not related to client services. Then they conclude that client services aren’t very helpful. The irony is that a well-staffed and well-supported client service department will more than pay for itself with higher referral rates and lower marketing budgets.

The next challenge is hiring the right client service people. Client service requires a totally different mentality from an advisory team. People who are attracted to client services work—both men and women—enjoy serving people and helping others. They don’t have a huge need to “get to the top” of the org chart.

Instead, they get their satisfaction out of how much they can do for another person. They aren’t hard to spot, and we’ve found that the best client service people have been in client service their whole lives and love it. You’ll want them to stay in client service forever—maybe moving up to management, but still in client service—because client service people are usually great trainers (it’s another way to help people).

The first screen we use for client service people is “What makes you most satisfied?” Here are some bad answers, which identify people who probably won’t make good client service representatives (CSR): “personal growth,” “doing my best,” “moving up the career ladder.” You’ll notice that none of these is about other people. You’ll also rarely have a good CSR ask a question like, “Where is the firm going?” or “Where am I going?” Good client service people usually are just happy to get some people to help.

On the other hand, good CSR answers include: “I have a lot of skills and abilities, but what makes me most satisfied is ensuring that the people around me have what they need to get their jobs done”; “I like to stay busy and get bored easily if I don’t have enough to do”; and of course, “I like to find ways to solve people’s problems.”

In our experience, client service is really a mentality, so once you’ve hired the right people, training and managing them is relatively easy. They’ll want to learn everything they can about a firm and its service so they can be most helpful. The key is to train them as quickly as possible (so they don’t get bored) and provide them with lots of resources to solve client issues.

Managing them is almost as easy. Client service types are typically good rule followers so all you have to do is give them clear guidelines. They tend not to be very innovative so be sure their guidelines are comprehensive, but they will be tenacious and resourceful advocates for “their” clients. Be ready for some pushing to do right by your clients and some stepped-on toes in the interest of getting the answers they need. A list of do’s and don’ts will usually keep them from going too far, but if they do, don’t criticize them for it: It will hurt their feelings and dampen their morale. Instead, praise them for going above and beyond, and then suggest ways they might be even more effective.

Finally, we can address the advisor’s question that started this column: How do employers assess the performance of their client service people? At large companies, supervisors listen in on client service calls or record those calls for review. Most advisory firms don’t have the resources for that. Instead, we find that we can get a very accurate picture of a CSR by looking at two things:

  • Attitude. As we’ve said, good client service people love what they do. Bad ones don’t. And it’s not hard to tell the difference. When a CSR regularly complains about the clients, fails to follow up, has a bad attitude toward the firm, seems to be more interested in being out of the office than working with clients or tells a co-worker or supervisor that something a client needs is “not my job,” they’re in the wrong job.

  • Client feedback. The short answer is that if some clients don’t rave about their CSR, he or she probably isn’t doing a good job. Good service is so rare these days that when people get it, they often mention it. Not everybody will, but if a CSR isn’t getting some rave reviews, it’s a bad sign. Conversely, clients rarely complain, so even a few client complaints about a CSR is a very bad sign.

We also have metrics for client service productivity. A very effective client service team should be able to handle $500,000 in revenue for each CSR. So if the firm has three service people and total revenue of $1.5 million, we have a good team. A four-person team at a firm with only $1 million in revenue has some issues.

One more note about client service people: Although advisors don’t like to hear this, many clients come to see their CSR as the “face of the firm.” Advisors often don’t realize how deep these client-CSR relationships are. Consequently, it’s very important to keep really good client service people at the firm. In many cases, it’s almost better to lose their advisor.