6 Ways Advisors Can Reach the Summit of Client Experience

The wealth management industry has made great progress over the last decade. It was not long ago when pitching stocks to strangers over the phone was the norm.

Now, a combination of increased expectations on the part of consumers, regulators and the industry itself have propelled it to new heights where client-centric and comprehensive advice has become a business fundamental.

While this growth is a significant accomplishment, the industry still has a long way to go before it reaches peak customer centricity. To borrow a mountain climbing analogy, the industry has reached base camp at Mount Everest.

That’s nothing to scoff at. It is a multi-week venture that starts in Nepal, requires a flight from Katmandu across the Himalayas to a small moun­­­tain airstrip in Lukla and then a weeklong trek beginning at an elevation of 9,000 feet, and 60 miles later ending at over 17,000 feet. Yet it is still only halfway up the mountain.

Research shows that the wealth management industry is also only halfway up the mountain. Despite great progress, the J.D. Power 2021 U.S. Full Service Investor Satisfaction Study found:

• 56% of clients said their advisor did not provide all the products and services needed to address all their wealth management needs,
• 33% said that their advisor did not understand their financial goals/needs and used terms they didn’t understand, and
• 53% said they did not completely understand the fees being charged.

Here’s the Problem

There seems to be a gap between where the industry is and its full potential.

Is this OK? Is halfway up the mountain an acceptable destination? Industry leaders no doubt would say a resounding no.

What we do as an industry is too important. The impact of good financial advice is too profound. The ripple effect is too pronounced.

Good financial advice can change lives. Good decisions and planning today can markedly affect an individual’s future and that of their family, community and even society at large. Making good financial decisions gives a person the power and control to affect their future and good financial planning provides clarity on how to get there. The value of this cannot be overstated.

Where We Can Improve

We know as an industry that we need to keep climbing and as the research shows there are specific areas of improvement where we need to train our focus:

• Embracing an unwavering commitment to the client and fiduciary responsibility. This is good for everyone, the client, the financial advisor’s success and all those that support them.
• Adopting a true advisory process. There is a place for selling, but the day-to-day role with clients must be to advise. To help clients make decisions that align with their values, goals and aspirations and to help them act on those decisions.
• Gaining a deep understanding of the client’s life and what is most important to them. Adopt the practice of inquiry to help uncover the truth, both the knowns and unknowns, about a client’s values, goals and aspirations.
• Delivering comprehensive advice. Address the entirety of client wealth management and financial planning needs. Incorporate the expertise needed to accomplish this through teaming and strategic partnerships.
• Leveraging technology to provide anytime, anywhere access to information and to model the future. Provide the ability to explore multiple paths and future possible outcomes.
• Creating unmistakable and remarkable value. Leave no doubt as to the profound impact financial advice, and all the expertise that goes into it, has on a client’s wellbeing. Today and in the future.

The wealth management industry has made real and significant progress in transitioning from a transactional commission-based culture to one that values and supports more comprehensive client-centric fee-based client relationships. That is long trek from where the industry started, but we’re not at the summit.

And the last and pivotal part of the journey is often the hardest part, one that will take effort, time and resources needed to realize the full potential.

Tom Rieman is senior director, head of wealth solutions for J.D. Power.