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Practice Management > Building Your Business

A Great Client Experience Lifts Shareholders, Too

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What’s a great client experience really worth in the wealth management business?  Quite a lot, according to my firm’s new study on the subject.

Wealth management firms are engaged in a dangerous “race to the bottom” as they lower fees and default to competing on price, in the apparent absence of any other meaningful differentiators.

But might client experience be the key to avoiding this death spiral of commoditization?  That was the question my firm, Watermark Consulting, sought to answer with its Wealth Management Customer Experience ROI Study.

What Is the Client Experience?

First, when evaluating the impact of client experience in wealth management, it’s important to understand that the “experience” is shaped by many interaction points (beginning even before someone is a client). Yes, fees and performance matter. However, so too does everything from the accessibility and professionalism of the advisor, to the quality and readability of the firm’s investment reports and information resources.

Every live, digital and print touchpoint helps shape client impressions to some degree. Or, to put it another way — excellence in the client experience isn’t just about investment returns.

How the Study Was Conducted

Using this holistic definition, the goal of our study was to illustrate the overarching influence of client experience on the success of wealth management providers.

To accomplish this, we looked at the cumulative total stock returns for two model portfolios of publicly traded wealth management firms: one consisting of client experience “Leaders” and the other with client experience “Laggards.”

(Firms were separated into these groupings using J.D. Power & Associates’ annual Full-Service Investor Satisfaction ratings, which are based on a broad assessment of client experience quality, consistent with the definition above.)

The Results

Ten years of investor satisfaction rankings and stock returns were included in the analysis. The results were quite compelling, as vividly illustrated by the graphic below, which shows the cumulative returns for the Client Experience (CX) Leader and Laggard portfolios.

Wealth and Asset Management Client Experience ROI Analysis Wealth and Asset Management Client Experience ROI Analysis

On average, wealth management firms with highly rated client experiences far outperformed those with low ratings. Over the decade analyzed, CX Leader firms delivered an aggregate total return that was over four times greater than that of the CX Laggard firms — an astounding 110-point performance differential.

While there are obviously many factors that influence a company’s stock price, the results of this study indicate that, over the long term, a great client experience helps build business value while a poor client experience erodes it. (Notably, that’s a takeaway with relevance to any wealth management firm, whether public or private.)

Implications for Wealth Management Firms

If, as this study suggests, there is competitive advantage to be gained by delivering a superior client experience, then the next question is:  How does one accomplish that?

While there are many “knobs and levers” that must be manipulated in order to stage a great client experience, our study highlighted a number of best practices for wealth managers, a few of which are summarized below:

  • Focus on client loyalty, not just client retention.

Wealth management firms often rely on client or asset retention to gauge the quality of their client experience. While retention is a valuable metric, it can be a misleading indicator of client perception. (After all, a retained client may not necessarily be a loyal client.) Internal metrics such as client/asset retention should be supplemented with externally focused, Voice-of-the-Client insights (e.g., client surveys, in-depth interviews, client experience assessments).

  • Demonstrate genuine advocacy for clients.

Advocacy is a powerful driver of loyalty. Wealth managers should show clients that they’re advocating for them — in tangible ways, not just through marketing copy. That means engaging clients proactively (during good times and bad), communicating with transparency (no hiding behind opaque disclosures), and embracing a fiduciary standard (the quintessential expression of a client-first business philosophy).

  • Obsess over emotions, not just earnings.

The best client experiences are those that strike an emotional chord, be it by accentuating positive feelings (e.g., celebrating clients’ planning milestones) or mitigating negative ones (e.g., addressing clients’ sources of anxiety). Clients might not remember the exact rate of return a financial advisor achieved, but they’ll surely remember how that advisor made them feel — confident or confused, assured or anxious, informed or ignorant. When it comes to building client loyalty, it’s those emotional responses that make all the difference.

Wealth management firms are at risk of becoming marginalized in an environment where more and more people view the industry’s offerings as commodities.

One of the best ways for firms to avoid that outcome is by delivering an exceptional end-to-end client experience — one that is devoid of common frustrations, one that inspires confidence, one that cultivates trust.

That’s the kind of client experience rewarded by both Main Street and Wall Street.

Jon PicoultJon Picoult is a keynote speaker as well as founder of Watermark Consulting, a customer experience advisory firm that helps companies impress customers and inspire employees.  He’s worked with the CEOs and executive teams of some of the world’s top brands. Contact Jon at, or follow him on Twitter @JonPicoult.


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