Advisers Need to Create Exceptional Client Experiences: Cerulli

Investors compare the service they receive from wealth management firms to the type of service they get from consumer goods and technology behemoths.

To remain competitive, advisers need to totally rethink the way they service clients, according to a new report from Cerulli, “Client Communications: Built on Trust, Nurtured by Strategy.”

To deliver exceptional client experience, an adviser’s strategy must incorporate creative client segmentation, intergenerational engagement, gestures of recognition and appreciation and holistic financial planning, Cerulli says.

“Advisory practices compete against firms that consistently deliver personalized experiences, carefully curated to anticipate needs and match preferences,” Cerulli says. “As consumers, investors are inclined to compare their wealth management experiences not against other wealth management firms but against consumer goods and technology behemoths (e.g. Facebook, Apple, Amazon, Netflix, Google) that they regularly interact with for everyday products and services. These firms provide seamless digital interfaces with individualized content supplied on demand, integrating feedback and adapting to each request. To thrive in this competitive environment, advisers must reevaluate how their practice intentionally creates an experience for its clients.”

So, to create client segmentation, advisers should no longer think of tiers of clients, i.e. A, B, C. Instead, they should “build client personas that identify niches within their book of business” such as women who have suddenly become single, either through divorce or the death of their spouse, or a business owner in the Denver area, married with teenage kids.

Cerulli suggests that advisers then take this information and think about what needs and values these niche clients may have and how they would like to be approached. Cerulli suggests that advisers use metrics they already have, such as account size, net worth, age, marital status, parental status, and pair that with intangible metrics such as interests, life stage and lifestyle. To obtain the intangible metrics, Cerulli says that broker/dealers, custodians and other strategic partners can create templates that investors can fill in and that these partners can then share with advisers.

Advisers can then take these client personas and pair them with workflow automation to serve their clients, Cerulli says. Nearly 60% of “experience-centric” advisory practices use workflow automation for client interactions.

With respect to intergenerational engagement, Cerulli strongly encourages advisers to create multi-generational adviser teams so that when a client passes away, there are younger advisers on the team who the heirs already know and likely to remain committed to. “Advisers often struggle to engage younger investors, including clients’ children and heirs, but given their aging client bases, the need to do so is increasingly urgent,” Cerulli says.

In addition, “teaming creates a deeper, more enriching experience for clients through the advisers’ ability to pool resources, specialize and support one another’s client relationships. Clients who work with integrated, effective multi-adviser teams appreciate feeling like they have an entire team of specialists at their disposal.”

With regards to recognition and appreciation, Cerulli notes that many advisory practices hold client appreciation events, but these are usually large gatherings held once a year. Instead, advisers should consider more intimate gatherings on a more frequent basis, such as every quarter. Advisers should also make themselves available to clients in the event of a crisis or emergency that the client faces. One adviser told Cerulli that they will even go to clients’ homes to help them set up their web preferences on their computers and mobile apps. It is the idea that advisers will go above and beyond their typical financial planning services to be seen as a trustworthy partner who is on their client’s side, Cerulli says.

In terms of providing holistic financial planning, 55% of advisers plan to offer more comprehensive financial planning to clients by 2020, up from only 33% in 2013. Cerulli notes that there are a number of tools on the market that can help advisers offer such services, including MoneyGuideOne, MoneyGuideElite and Foundational Planning, the latter from eMoney.

“Experience-centric advisers recognize that client relationships form the backbone of their business and nurturing them requires dedicated acts of appreciation, which can be delivered in various manners,” says Marina Shtyrkov, a research analyst with Cerulli. “By segmenting their client base into client personas, advisers can automate workflows and optimize engagement opportunities.”