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Matt Sommer, Janus Henderson

Practice Management > Marketing and Communications > Client Retention

Here's What Separates 'Somewhat' and 'Very' Satisfied Clients

By Matt Sommer

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What You Need to Know

  • The most successful advisors function as mentors and support systems for their clients.
  • Providing a consistent level of personalization to each client should be a top priority.
  • Confidence can potentially affect both investment outcomes and satisfaction levels.

When thinking about the everyday responsibilities for financial advisors, tasks such as advising on investment decisions, aiding in retirement planning and crafting personal financial plans likely come to mind. However, financial advisors seeking to differentiate their practices — and outpace the growth of their peers — must extend their offerings beyond financial advice.

The most successful advisors function as mentors for their clients, improving their financial literacy and serving as a reliable support system. 

Based on the findings from the latest Janus Henderson Investor Survey, 65% of investors working with a financial advisor are “very satisfied” with the quality of the relationship, while 33% are “somewhat satisfied.” 

While it’s encouraging that most investors are happy with their advisor, we wanted to take a deeper look at what distinguishes “very satisfied” from “somewhat satisfied” investors. Our survey findings revealed that, to improve client satisfaction levels, advisors should look to expand their services and acknowledge how much psychology plays into their clients’ financial success.

Many advisors serve a diverse pool of clients with a range of needs. As such, providing a consistent level of personalization to each client should be a top priority. Additionally, advisors shouldn’t overlook the crucial role that confidence plays in empowering their clients, potentially affecting both their investment outcomes and satisfaction levels. 

Research has shown that investors with high levels of confidence are more likely to adopt a long-term perspective and remain committed to their investment plans. This is despite  inevitable periods of heightened market volatility that can lead to rash investor decisions. Investors who are confident in their approach are more likely to resist impulsive reactions to market fluctuations and remain disciplined over time. 

A proven way to build clients’ confidence is to improve their financial literacy. When looking at financial education, 56% of our survey respondents that are “very satisfied” with their financial advisor relayed that their advisor provides them with financial education; only 48% of those “somewhat satisfied” respondents received the same service. This shows a clear connection between offering financial education and client satisfaction levels.

Although clients are paying for their advisor’s expertise, it is imperative for financial advisors to assist them in comprehending and applying an array of financial skills so they can feel confident they’re on the correct path toward their long-term financial goals. 

Another technique that advisors can employ is practicing positive reinforcement through acknowledging and rewarding positive financial behaviors or milestones. By providing encouraging feedback and making sure that each client feels seen, advisors can reinforce constructive financial habits and bolster clients’ confidence in their financial decision-making. This also strengthens the advisor-client relationship by creating a supportive environment.

Emotional intelligence can also play a key role in shaping investment decisions. Investors with high emotional intelligence can recognize and control their emotions when market dynamics inevitably shift. Advisors play an essential role in ensuring that clients don’t let their emotions get the best of them when making investment decisions. 

In asking our survey respondents what their advisor provides to them, 40% of those surveyed who said they were “very satisfied” with their financial advisor relayed that their advisor helps “keep my emotions in check during periods of elevated market volatility.” Advisors should aim to build a collaborative relationship built on trust so that clients turn to them before they make a risky decision.

Additionally, the concept of “commitments” suggests that people generally have a strong inclination to uphold their promises. Advisors can help clients control their emotions by taking an approach that fosters commitment and thoughtful decision-making. For instance, advisors may initiate a conversation with clients by proposing an agreement, such as: “Can we agree that we will revisit your entire financial plan before making any wholesale changes?” 

This approach seeks the client’s commitment to a thorough review before implementing major strategy alterations. It also creates a buffer to allow emotions to settle and provides opportunity for an in-depth assessment and discussion. As a result, both advisors and clients benefit from a more measured and considered approach.

Other needle-moving psychological techniques include visualization, behavioral nudges and goal-anchoring. Visualization involves guiding clients to imagine their goals and aspirations, making objectives more concrete and inspiring. Behavioral nudges draw from behavioral economics principles to influence positive financial behaviors. Advisors can encourage clients to adopt beneficial financial habits through cues or prompts, for example. Lastly, goal-anchoring involves helping clients align their investment decisions with specific goals and values.

While good financial advisors provide tailored financial guidance, great financial advisors build long-lasting relationships by taking the time to understand their clients on a personal level. Establishing client satisfaction goes beyond numbers: It requires advisors to address and support the emotional and behavioral aspects of financial decision-making. By embracing these strategies, advisors can build trust and help ensure that clients stick to their long-term goals.

Matt Sommer heads the specialist consulting group at Janus Henderson Investors, a global asset management firm based in London.

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