Given the chaotic financial environment of the past few years, innovative wealth management firms see a real business need to improve the softer side of how they interact with clients.
“It’s clearly become more important after the 2008 financial crisis and the Madoff debacle,” said Marla Bace, principal and chief marketing officer for the Madison, N.J.-based firm Brinton Eaton. “There’s more emphasis on the approach, on transparency, on comfort for the client and what is the optimal fit.”
This includes working in teams, strategically matching advisors with clients, and appointing “client ambassadors” to improve feedback loops. These strategies are detailed in a recent best practices white paper by Fidelity Investments, “Finding Freedom to Focus on Strengths: Strategic Hires and Realignment.”
Most pace-setting firms adopt the team approach, albeit with variations, according to the report. “It’s become more important for clients to have more than one person to go to,” Bace said.
For instance, Mariner Wealth Advisors, among the fastest-growing registered investment advisor firms in the country with nine offices in seven states and $2.1 billion in assets, assigns each client a three-person team—two wealth managers and a client service administrator. Brinton Eaton also has three advisors per team—a principal, a financial advisor and an analyst. Detroit-based Rehmann Financial, with $2.2 billion in assets under management, uses as many five people on a team.
Dream Teams
Full-service teams are critical to help wealth management firms differentiate themselves from big wirehouses, said Jeffrey Phillips, chief investment officer and director of operations for Rehmann Financial. “It shows that we’re more holistic and aren’t just asset managers with traditional gatekeepers. It’s a more consultative approach without sales pressure.”
Rehmann team members include specialists in taxes, retirement and “corporate investigative services,” consisting of retired FBI and Secret Service agents who conduct due diligence and background checks for clients on potential business partners, fund managers and employees.
While many firms keep advisors who land prospects on that client’s team, others, like Mariner, separate the two functions.
Advisors who are considered “relationship builders” are completely dedicated to sales, compensated based on new business, and have “no client responsibilities at all,” Bicknell said. Mariner advisors who are more comfortable with financial planning, meanwhile, are dedicated solely to relationship management and compensated based on retaining their existing book of business.
Match Game
Innovative wealth managers are also striving to find the best match between advisors and clients, weighing such factors as a client’s needs, advisors’ expertise, personalities and cultural affinities.
Bicknell and Brian Leitner, senior vice president of wealth management, sit down and review a new client’s profile to determine which advisory team is the best fit.
“Some clients need an estate planner, others need investment advice and we make sure they’re with advisors who have those capabilities,” Bicknell said. “Matching personalities is harder. Some people are more detail-oriented; others are more comfortable with the big picture. But it’s more of an art than a science to put the right people together, and if it doesn’t work we’re not afraid to make a change.”
When matching clients and advisors, Northern Trust tires to make sure advisors have other clients who are similarly situated, in terms of investment goals, wealth transfer plans and professional profiles, according to Charlie Mueller, the firms’ senior vice president and head of Wealth Advisory.
LGBT (lesbian, gay, bi-sexual and transgender) clients, for example, have unique wealth transfer needs, and do not have the benefit of the unlimited marital deduction. “There may be beneficiary issues within the client's compensation plan at work,” Mueller said. “Not all of our advisors have experience with those issues, but we do have advisors that can really add value in that area because of their tenure in working with LGBT clients.”
And business owners, a big part of Northern Trust’s client base, often have families with unique estate and financial planning considerations that involve complicated family dynamics and succession planning, Mueller added.
One new Northern client, he said, was a detail-oriented chief executive of a Fortune 500 company who wanted facts and data presented quickly and crisply. But his wife was also a major financial decision maker for the family with a warmer and more collaborative style.
“So I chose a team that could connect with both the husband and wife's very different communication styles, while delivering facts quickly and concisely based on experience in working with C-Suite executives,” Mueller said. “Many times you have to deliver both.”
Focus on Feedback
Getting useful feedback from clients is also a crucial step to enhancing customer service, these managers stress. Advisory boards, formal client surveys as well the advisory teams themselves are becoming increasingly important feedback loops, according to Fidelity.
In addition to helping find weak spots in the existing service model, these customer surveys also help prospecting, says Brinton Eaton’s Bace.
“We’re using language from our current clients to provide prospects with information about why those clients found us helpful and saw as our value proposition,” he says.
Rehmann has improved on the traditional client survey by appointing “client ambassadors.” Independent of the advisory team, these ambassadors periodically contact every client on the books to see if they’re happy and if their needs are being met.
“It’s been very successful,” said Phillips. “The ambassadors don’t have an on-going day-to-day relationship with the client, so they can come in and get an honest assessment of how we’re doing and what we need to improve on.”
No advisory team will ever admit to taking their clients for granted, but many do. Those not afraid of putting energy into the softer side of their service models, and acting on client feebdack, will have a marketable edge.