Customer Service Critical to Asset Manager Success

A study found that institutional investors’ satisfaction with their investment managers is greatly influenced by client service and can be managed regardless of the economic climate or investment performance.

According to the study, jointly conducted by Chatham Partners and Investment Metrics, 60% of overall satisfaction can be attributed to investment performance, but this can often be cyclical and unpredictable. In contrast, 40% of client satisfaction is attributable to service-related factors that can be delivered consistently.   

In addition, the research suggests that managing customer service is not a singular act, but rather a broad collection of activities that combine to create high overall satisfaction levels.   

According to a press release, the top five factors, in order of importance, attributable to client service include:  

  • Market/investment knowledge of portfolio team
  • Clarity of investment reports 
  • Problem resolution skills of client service representative
  • Frequency of contact of client service representative 
  • Timeliness of investment reports 

The study also found clients tended to be highly satisfied with their investment managers and client servicing teams overall during long periods of high performance (68%) and short periods of under-performance (58%). Most clients (83%) were dissatisfied with their client service contact during long periods of low performance, while the majority of clients (66%) felt like they were treated as an “important client of the firm” during long periods of high performance.  

The majority of clients who were the most satisfied with their fee arrangements had either high performance rankings over longer periods (69%) or low performance rankings over shorter periods (61%). In contrast, less than 40% of clients were highly satisfied with their fee arrangements during short periods of high performance or long periods of under-performance, while nearly half of all clients were dissatisfied with their fee arrangements regardless of their performance rankings over a short period.