Congratulations! Your clients are complaining.
Sounds ridiculous, right? But ask any experienced producer how much he appreciates receiving constructive criticism, and you'll immediately understand why.
"When we experience problems, we see big opportunities," says Charles ReCorr, a wirehouse producer in Raleigh, N.C. "When you have a problem with a client, you can demonstrate your ability to resolve it dramatically. You're a problem solver."
Dig up some dissatisfaction and come out smelling like a rose, say producers with experience in the complaint department. And there's no better way to unearth the Angst that may be quietly taking root in your client's mind than to extend an invitation to grumble--whether in a focus group meeting, a questionnaire or a casual conversation.
"Any financial consultant out there who is not consistently canvassing his or her clients is being very foolish," says ReCorr, who mails each of his clients a brief satisfaction survey two weeks before their birthday every year. "We try to sit in front of each of them around their birthday and ask about any issues, any watershed moments happening in their lives, and go over the questionnaire," he says. Why birthdays? "If people are going to have psychological issues or major changes in their outlook on life, they generally happen around their birthday," he explains.
At Freedman Financial Associates in Peabody, Mass., clients are invited to join the firm's 12-member "advisory council," which meets twice a year to brainstorm over dinner.
"We usually pick two or three topics to discuss at the meeting," says President Marc Freedman. Over the past five years, the firm has picked up dozens of valuable ideas, ranging from seminar topics to improving the account statements from Freedman's broker/dealer LPL Financial Services. "We even had a problem with a staff person once," Freedman says. "Our clients told us it was a problem."
Pesticide for Your Practice By welcoming feedback, you're nipping emerging complaints in the bud, before the compliance guys get involved. Over the telephone, ask open-ended questions like, "Is everything OK?" says Bill Good, founder of Bill Good Marketing in South Jordan, Utah. "If they send in a complaint in writing, it goes on your record. So the name of the game is finding the thing that's irritating them before they get mad enough to call ... and that means staying in regular touch by phone."
ReCorr has another way of prying brutally honest criticism out of tight-lipped clients. "We need your help!" he pleads in his survey. "Our commitment to you is to provide a level of performance and service you deserve and desire. To accomplish this, we must have a sense of how we're doing from your perspective. Please feel free to be candid. We are thick-skinned. We can only correct a problem if we know it exists."
Still, some clients simply will not complain, no matter how comfortable you make them feel, says a Wheat First Union producer in the Southeast. "Often, unhappy clients don't comment," says the broker, who asks for feedback in his newsletters. "They'll just move their account. And that really hurts, even after 20 years in this business."
Nancy Salk, senior research manager with J.D. Power and Associates in Westport, Conn., says she knows exactly why clients don't complain, despite the pleadings of their brokers--they just want to remain anonymous.
"The necessary evil is to have some type of third-party intermediary involved in the survey process," Salk says. "There needs to be some way to filter general complaints so clients are not identified." Couldn't a broker conduct an anonymous survey? "That would never fly," says Salk, who specializes in financial services. "Respondents are very savvy and they know that there are too many ways to identify a client. If you mailed it to me, you'll probably be able to identify it."
Identifying Impossible ClientsOf course, when you finally strike gold and find clients who are candid, some will undoubtedly come back with outrageous requests, brokers say. "Some clients have asked me to call them every morning with their portfolio value," ReCorr says. But even an unreasonable demand like this one can hold some value. In this case, he offered the client access to account information online. "Again, we're using that dissatisfaction as a way to introduce a new product or service that may be helpful to them," he says.
Stan Cahn, a producer with Prudential Securities in Washington, D.C., also appreciates the value of a reasonable complaint, but admits that some customers are impossible to satisfy.
"You do get some chronic complainers," Cahn says. "But generally, a complaint shows that somebody thinks enough about you to verbalize a legitimate concern, and there are probably other clients who feel the same way but have failed to mention it."
Cahn updates client information in an annual "information-gathering" survey and invites clients to offer suggestions to improve his level of service. And because he's so tenacious (he sends as many as four follow-up letters) response rates reach 60% to 70%. After all that hard work, Cahn says he makes lots of noise about fixing a problem.
"Not only do we let that client know," Cahn says, "we let all our clients know what we're doing to address the situation."
Among the questions you'll want to ask on any satisfaction survey are several "top-line drivers of client satisfaction" that the marketing executives at Merrill Lynch have identified. Every other year, the firm surveys a "representative sampling" of its five million household customers, asking them to grade its financial consultants on performance issues such as whether they are:
1) Easily accessible,
2) Following through and keeping promises,
3) Addressing problems promptly and
4)Providing sound investment advice (looking out for the client's best interest).
According to firm spokesperson Anya Buenger, Merrill also asks, "What kind of situation would prompt you to perhaps switch to another firm?"
Responses are compiled in a report and distributed to financial consultants and their branch manager, Buenger says. Some customers choose to remain anonymous, others identify themselves. The key is to gather insightful and practical feedback. "You want to make sure you ask questions and get results that are actionable," she says.
While shuffling through a batch of survey responses, wirehouse broker Charles ReCorr noticed that one question--Do you feel we pay enough attention to your account?--generated some peculiar responses. "How would I know if you're paying enough attention to my account?" one client shot back. "Obviously, they don't know what I'm doing for them every day," ReCorr says.
So, he developed a standard letter to tranquilize nervous clients. "Just a short note to let you know that I recently conducted an informal review of your investments," the letter begins. "Everything looks fine, or otherwise I would have called you immediately. I think it is worth you knowing that we do lots of reviews that may be out of your awareness. The letter concludes, "P.S. I promise I will not send you a note every time I look at your portfolio."
Using a scale of strongly agree, agree, disagree or strongly disagree, Boston-based Dalbar Inc. asks retail clients to rate their brokers on the following criteria.
1) Gives clear explanations
2) Considers tax implications of recommendations
3) Is proactive and keeps me informed
4) Takes the time to determine my wants and needs
5) Offers products and services that match my needs
6) Helps me make informed decisions
7) Is available when I need him or her
8) Updates recommendations as my needs change
Dalbar uses these questions in its annual Dalbar Financial Professional Survey service. For §1,500 a year, Dalbar will survey an adviser's clients (the percentage depends on how many clients an adviser has) and use the results to rank that adviser against his or her peers. Call 617/723-6400 or log on to www.dalbar.com/web_rating.htm.
