How advisers can improve productivity and client experience

We asked advisers around the world about the challenges they face and stress tested some of their assumptions with their clients. The results were insightful.
Advisers in Australia told us that one of their key business goals for the next three to five years is to deepen relationships with clients. Yet, the day-to-day demands of running a practice may make it difficult to focus on that goal. In fact, advisers surveyed said they spend more time on investment management than on either client-facing activities or prospecting.

The good news is, research shows that the interpersonal side of advice, which includes personalisation and behavioural coaching, can be the most valuable aspect of professional advice. And in an environment of transformational change, many advisers understand that their future success depends on something they can still control: creating strong relationships.

To enhance your position as the client’s overall wealth manager, here are three ways to drive value into the practice and differentiate the client experience in today’s competitive marketplace:

1. Create economies of scale in investment management.

As assets grow, finding the time to serve clients and attract new business can get even harder. One potential solution is to outsource portfolio management by putting client assets into model portfolios – investment strategies created and maintained by asset managers that employ teams of experience investment professionals. According to the State Street Global Advisors SPDR ETFs/Investment Trends 2019 Managed Accounts Report, 35 per cent of financial planners recommended managed accounts. And in the US, more than 50 per cent of advisers are using model portfolio solutions to help them scale their business and service clients more efficiently.

The introduction and wide-scale availability of outsourcing portfolio management options have been instrumental in increasing the adviser’s capacity to spend more quality time with clients, create investment process efficiencies and grow the menu of services offered. While financial and investment planning are at the core of adviser’s value, the practice still has to balance the time spent between day-to-day investment management and building client relationships.

While outsourcing portfolio management requires a certain amount of delegation, it doesn’t necessarily mean a loss of control. Growth of the practice and client advocacy are directly correlated with how effectively the adviser communicates and demonstrates the value of the offer.

Clients with assets in model portfolios supported their use and reported positive impacts including specific benefits related to performance, risk and fees.

2. Your value should be clear and sustainable.

A key part of establishing a value proposition is being consistent in articulating it. But that doesn’t always remain the same, especially as the business adapts. New developments – shifting demographics and the evolution of client needs and expectations; redefined cost and competitive structures; rise of technology and its role as a facilitator – can challenge the traditional value proposition.

Some advisers indicated they equate a quality client experience with hands-on investment management. However, the importance of spending time with a client cannot be overlooked. Advisers that succeed in this experience economy facilitate memorable moments, disrupt the status quo, operate from a client-centric mentality and align services with clients’ drive toward self-actualisation.

The client experience is a continuous journey with the practice, from prospecting and onboarding to ongoing engagement. Optimise your client experience strategy to reframe the perception of value (in the eyes of the client). Done well, the approach will pay dividends: increased retention, reduced attrition, and a stronger referral system.

3. Service is your superpower. Tap into it.

Most investors and advisers see higher levels of service as key to better outcomes from improved decision-making and financial planning. The power is in how you tailor service experiences – and more importantly, in how you segment clients by needs, not just AUM, to create a scalable offer you can consistently deliver on.
When asked for three reasons why clients are loyal, more advisers overall describe aspects of their level of service than performance or price – and that can often translate to a solid competitive advantage. Adviser value is better measured by the impact of services on investors’ financial outcomes. Price and performance will always be a factor; investment management success is critical to achieving financial security and underperformance is often a driver behind client attrition. But understanding client goals and fears are ways to build trust and weather uncertainty.

Change is challenging, but evolution and innovation also represent an attractive upside if objectively evaluated and engineered to work in concert with the vision for the practice. Pivoting to scale your practice to solve capacity constraints, such as selecting model portfolios, advisers can allocate more of their time to focusing on the client’s individual situation. Clients perceive this to be more relevant and integral to their personal financial wellbeing, shifting the conversation toward financial outcomes, such as having enough money for retirement or building a family legacy. It’s what investors want – and it’s where advisers can generally generate more excess returns for clients in considering financial planning and modifying behaviour.

Brie Williams, head of practice management, State Street Global Advisors