Gratitude can be defined as the quality of being thankful or the readiness to return kindness.
Janus Labs, Janus Capital’s consulting arm, created a program it called “The Art of WOW” nearly five years ago to help encourage advisors and financial professionals to express gratitude on a regular basis.
And new research from Janus Labs reveals showing gratitude can impact the careers of financial intermediaries.
The survey of more than 300 financial advisors from all major channels—RIA, wirehouse, regional, independent, bank and insurance—found that 74% say they regularly express gratitude to clients.
However, advisors are split on two distinct approaches of expressing gratitude: 51% apply the ad hoc approach, which Janus Labs describes as “expressing gratitude when the opportunity seems to arise, without prior planning,” while 49% apply the systemic approach, which Janus Labs describes as “expressing gratitude through thoughtfully considered action, tailored to the client’s personality.”
During a visit to ThinkAdvisor’s New York office, John Evans Jr., executive director at Janus Labs, explained why advisors need to not only express gratitude, but also employ a systematic approach.
“[The survey shows that] advisors who have a systematic approach to gratitude—a.k.a. delivering ‘wow’ experiences—that they were keeping clients, they were replicating clients and they had more joy going to work,” Evans told ThinkAdvisor. “What a concept: Joy!”
According to the survey, 90% of advisors who expressed systematic gratitude reported greater enjoyment and feelings of success in their practice.
A higher percentage of advisors who express gratitude systematically (57%) report being highly satisfied in their career (37% for ad hoc).
Not only are they feeling successful, the survey found they’re achieving success too—and more so than their “ad hoc” counterparts.
According to the survey, the average AUM for advisors who expressed their gratitude systematically was $146 million, compared to $116 million for advisors who took an “ad hoc” approach. Similarly, the ad hoc advisors had an annual practice growth rate of 2.4% less than the systematic advisors.
When comparing advisors who express gratitude regularly and systematically versus those who do not, the results were even more dramatic, according to Janus Labs.
The survey found the average AUM for advisors who expressed their gratitude regularly was $154 million, compared to $118 million for advisors who do not express gratitude regularly. The annual practice growth rate is higher among advisors who regularly express gratitude compared to those who do not (13.1% vs. 11.2% respectively).
The survey also found that 91% of the advisors who expressed systematic gratitude experienced more frequent referrals from their clients.
Expressing gratitude, or “wowing” clients as Evans likes to describe it, can be helpful in the face of both robo-advisors and the Department of Labor’s fiduciary rule, according to Evans.
“If we look at just the quantitative side of the equation in the relationship between the investor and the advisor…vis-a-vis fees, it’s a race to the bottom for client experience,” he said, adding, “Advisors are going to have to demonstrate their value beyond investments.”
He gave an example of an advisor who’s following “the art of wow.”
“[The advisor} takes it upon himself to do financial planning for a number of his client’s philanthropic concerns,” Evans said. “That’s demonstrable value. He’s taking time and energy and helping philanthropic concerns improve their financial outlook. We think that’s a great example of going beyond the investments, going beyond the business at hand.”
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