One of the central pillars of securities regulation, the “know your client” rule, requires firms and their representatives to use reasonable diligence in opening and maintaining accounts.
Knowing a client from a compliance perspective continues to be essential, of course, but in today’s hyper-competitive environment, deep knowledge of what constitutes client satisfaction with an advisor’s services has become equally important.
Financial advisors certainly know that clients are satisfied by responsiveness and performance. But those are essentially first-tier criteria.
Advisors can miss specific and perhaps deeper drivers of satisfaction by not probing to discover what clients actually want — a very rational response to the concern is that the advisor may not be able to satisfy a need once it is revealed. There’s a related belief that it’s best not to disturb a seemingly satisfactory relationship.
In either case, an advisor could be missing an important signal that would increase client satisfaction and strengthen the client bond.
Mentioned in a previous article was a recent study by the consulting firm of Oliver Wyman. After surveying clients of financial advisors, that study found that 77% of those surveyed would appreciate receiving advice about property and casualty (P&C) insurance from their advisor or an expert the advisor suggested.
In addition, almost half those clients surveyed said they would be more satisfied with their adviser if P&C advice were part of the mix the advisor provided; even more telling is the fact that more than a quarter of study participants said they would increase the amount of money they invest with that advisor if he or she made such advice available.
Significantly, 41% would also stay with the advisor longer, and half said they would be more likely to recommend their advisor if P&C analysis were part of the mix.