The Big Picture

More satisfied clients mean more money for your business, according to Adrian Hodge, Senior Vice President at Fidelity Investments. “Over a 10-year period, if you have a very satisfied client, you are going to increase your revenue by 40%,” he asserted.

Fidelity recently did research on plan sponsor satisfaction and found that 47% of plan sponsors are not satisfied. Advisers might be assuming things about plan sponsors without actually asking, he noted. “We tend to overlay our own model,” he said. Brett Howell, a financial adviser at Merrill Lynch, added, “We always like to think we’re doing the right thing…but sometimes we’re not.”

Barbara Delaney, Principal at StoneStreet Equity, Inc., a National Retirement Partners firm, offered some advice on how to keep clients in the loop and, therefore, satisfied. Every client is a challenge, she said, and, to keep them, you need to hold their hands when they need it. Delaney stressed the importance of relaying knowledge and information, such as legislative updates, to sponsors. Advisers should give sponsors “insight into what’s going on and what’s going to happen with their plan going forward,” she said. Hodge pointed out that plan sponsors surveyed for the Fidelity research said that they wanted more of the following from their adviser: employee communication, group investment meetings, proactive check-ins, and industry updates.

What exactly should advisers say to their clients in this marketplace? Delaney said this is the time to tell clients to “stay the course.” She said that, at the time of the panel, her staff was preparing to send out an e-mail to their clients after debating whether to do so. Her firm has not sent one since the events of September 11, 2001, she commented, but her firm felt that current market events warranted some reassurance to clients. She pointed out that she is not saying advisers should not be worried about fiduciary concerns right now, but said it was a good week to remind clients that “we’ve seen this before.”

To gauge the satisfaction of clients, some of the panelists use surveys, whether informal or independent. Some of the panelists said they have used their own surveys or third-party surveys to receive client feedback. Rick Shoff, Senior Vice President and adviser with CAPTRUST Financial Advisors, said he discovered from surveys that his clients hired him for tools they were not even using. He also has sent an e-mail to his clients just asking what his most useful service is, and found the responses helpful.

It also does not hurt to ask plan sponsors directly how you are doing, Shoff said. He says he assumes clients will fire him tomorrow, which drives him to keep asking clients how the relationship is going. He thinks it is an added service value to be able to go to the client and say, “Look, I’m worried I’m making too much money.” Delaney agreed, saying, “I think you just have to ask the questions, always.” She reminded the audience that advising is a relationship business—always has been, always will be. For instance, sometimes the adviser even ends up playing “marriage counselor’ between human resources and the investment committee, she said.

Another tip Delaney offered is to find out what the plan sponsor wants before “selling.” She said when she first meets a potential plan sponsor client, she tries to engage in a dialogue and learn about the company and plan needs before she begins describing her services, tailoring her descriptions to fit the sponsor’s objectives.

When is it time to call it quits with a client? Shoff used an example of a situation with a client in which he learned that the human resources representative was feeling neglected because Shoff was going to the boss instead of the HR representative.

The topic of fees was discussed and Hodge commented that he thinks the industry needs to get more sophisticated in looking at fees. Delaney said she recently had to ask a sponsor for more money to do extra work when freezing a pension plan, because it just was not something she was getting compensated to do. It might be an uncomfortable discussion, but it means you’re on the right track, she explained.

It is a good idea to set fees and expectations with sponsors ahead of time. “Even some of the best advisers I know don’t do a good job of setting expectations,” Hodge said. “There’s a lot of room for all of us to improve….We have to step up as an industry and raise our game.”

Illustration by Chris Buzelli