How to Increase client satisfaction

If the market decline of the past year or so has taught the investing public anything, it’s that professional investment advice — whether from top Wall Street gurus, mutual fund managers or financial advisers — doesn’t ensure success.
The J.D. Power & Associates Full Service Investor Satisfaction Survey, which was released yesterday, found that 85% of full-service investor portfolios have declined in value during the past 12 months, and among portfolios that have declined, 61% have lost more than 30% in value.
There is, however, a bright side of the study: Investment returns ranked third as a driver of client satisfaction, with only 15% of investors putting it at the top of the factors that determine satisfaction with their investment firm (down from 24% last year).
Second in importance was convenience (17%, up from 13% in 2008).
The most important driver of satisfaction was the financial adviser himself or herself, accounting for 30% of satisfaction, up from 22% last year.
The study states that firms at the top in investor satisfaction — Edward D. Jones & Co. LP of St. Louis, LPL Financial of Boston and The Charles Schwab Corp. of San Francisco — excel at providing one-on-one relationships with investors. They do that, said Power, by ensuring that there are face-to-face interactions, discussions regarding risk tolerance and the development of strategic plans.
What can advisers infer from that?
First, it means that investments don’t push most clients’ hot buttons.
While investors want a decent return — and certainly don’t want to lose money — the vast majority are not fixated on investments and performance in the way that CNBC or Investor’s Business Daily would have us believe.
For most investors, investments are a means to an end. Rather than finding a hot stock or the next greatest alternative play, they want help, guidance and insight in answering the one question that’s at the back of their minds from about the time they turn 45 or 50: Will I have enough money to continue living the way I do once I stop working?
Investments are one way to tackle the “have enough” issue, which is why people turn to advisers. But investors at all levels of wealth also need help figuring out how to budget, how much they should save, where to live, how to pay for medical care and how to deal with all the other complicated and confusing issues relating to aging.
In fact, I’m going to go out on a limb and suggest that financial advisers would do themselves a gigantic marketing favor if they repositioned themselves as retirement advisers.
Of course, retirement advisers actually would have to deliver on their marketing premise, but I believe the opportunities for retirement specialists are vast. Even if baby boomers like me may not be able to afford retirement until we’re carted off from our jobs at age 78, the “have enough” issue is at the core of most of our money-related thinking.
So rethink your positioning. Do you want to be pegged as an investment adviser when investments can fall 30% a year, or would you rather be known as a retirement adviser when retirement — in one form or another — is on the minds of every baby boomer?

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