As consumers, we’ve all seen how technology helps improve our everyday lives, making it simple for us to handle mundane tasks like buying an airline ticket or ordering from a restaurant. But what happens when something goes awry—we purchase a ticket for the wrong date, or our delivery driver mistakenly goes to an incorrect address?
For all its positives, technology is never 100% seamless because we, as humans, are imperfect beings. That means well-run companies serving consumers or other businesses must balance high tech and high touch.
According to a recent survey, Americans point to technology as the culprit for poor customer service. The March 2023 National Customer Rage Survey found that 75% of Americans reported having a problem with a product or service over the past year—a rate that has more than doubled since 1976. Their biggest frustration: sitting through long prompts before being directed to a real person.
When it comes to customer service, registered investment advisors bring a unique perspective because they sit on both sides of the table—as a service provider to their clients and a customer dealing with vendors such as financial custodians. But, over the years, the industry has consolidated—and that means fewer options for both advisors and their clients, which, in turn, impacts customer service. On the RIA side, firms with more than $5 billion in assets under management oversee 90.6% of all client assets. Meanwhile, consolidation among large financial custodians—such as Schwab’s recent acquisition of TD Ameritrade—has put the squeeze on advisors, as large institutions prioritize call centers over dedicated customer support—impacting how RIAs serve the end client.
What can advisors do to preserve their relationships while also ensuring that they’re getting the best from their own partners? Here are three qualities advisors should both offer to their clients and look for in a potential business partner/service provider:
Flexibility. Customers want to work with partners who view them as individuals rather than one of hundreds or thousands. For custodians and other financial services providers, the situation is even trickier because they’re dealing not with individuals but thousands of businesses, each one with a different profile. When looking for a potential vendor, advisors should identify businesses that are flexible in their approach. Does the custodian offer an all-encompassing platform for smaller advisors and an option for larger advisors that allows them to maintain customized technology via an API program? It’s also important for the custodian to extend flexibility to the client, or else you can’t properly do your job. I have heard horror stories, like the time a custodian nearly lost a large account by refusing to accommodate a simple request: allowing the client to sign hard copies of paperwork rather than use DocuSign. Striking the right balance between technology and personal service, while giving people the autonomy to be flexible, separates the good service providers from the great. Likewise, advisors should learn how their clients prefer to communicate—email, text, phone calls—and engage in the way that works best for them.
Accountability. Providing top-notch customer service means owning your mistakes and not passing the blame onto someone else. Being accountable at all levels is essential. When an advisor shares something through an online system, they should have transparency and a way to track progress so they’re confident knowing their request isn’t ending up in some digital void. Likewise, advisors must always be forthright with their clients, following through on their promises and being honest when something doesn’t go completely as planned. From a service model perspective, advisors should look at a custodian’s structure. Is there a dedicated team or service provider, or will the RIA have to make repeated inquiries to call centers? With a team structure, the advisor knows they’re working with a group of people who understand their business, inside and out, and they will always have access to knowledgeable professionals, even when the lead manager is out of the office.
Passion. “Fake it till you make it” will only get you so far. At a certain point, people know when you’re not fully passionate about the work. Whether you’re an advisor serving individual clients or a custodian working with a B2B customer, we’re all in a relationship business. Though our industry often touts our state-of-the-art technology, all financial service providers offer roughly the same set of services. It’s commoditized. So, how do we stand out? By being personal. We’re not like Apple, trading on products, or Southwest, competing on price. We must be personal, we need to provide service experiences our clients can touch and feel and that are unique to their needs. For example, I previously used a personal shopper at Nordstrom, and ever since then, he sends me a few handwritten notes throughout the year that remind me of my experience and inevitably get me back into the store. Look for opportunities to surprise, delight and remind your clients about your passion for their goals and seek out service providers who do the same for you.
If you aren’t getting excellent service from your current custodian, ask yourself: why not? And then decide what you want to do—you have many options. You don’t have to switch over all your assets at once but consider testing a new partner with a few accounts and then growing the relationship over time based on how they deliver. After all, your ability to provide exceptional customer service to your clients is directly proportional to the level of attention you get from your providers and business partners.
As service providers, our people are our products. When purchasing any product, whether a smartphone or a pair of shoes, you wouldn’t tolerate shoddy workmanship, so why would you choose to work with a provider who doesn’t understand your business and treats you like a number rather than the unique entrepreneur you are?
Allen Harper is Head of Custody Service & Operations at Axos Advisor Services.
