Duran Duran

What one thing would you do to assure your firm is competitive for the next decade?

Wealth managers don't pay enough attention to the client experience they're providing

May 22, 2018 @ 4:21 pm

By Joe Duran

At the Icons & Innovators award ceremony held at the grand University Club in New York City I had the privilege of sharing a panel with lions of the industry: David Booth, founder of Dimensional Fund Advisors, Ken Fisher, founder of Fisher Investments, and Mark Tibergien, CEO of Pershing Advisor Solutions. The first question asked by Fred Gabriel, editor of InvestmentNews, has intrigued me for years and is worthy of a little extra reflection: "What one thing would you do to assure your firm is competitive for the next decade?"

I believe that 100% of any firm's growth, and all of its future profitability, will be driven by only one thing: its client experience.

What is client experience?

Client experience, or CX, is everything a client encounters in order to receive the end product. Think about Starbucks as an example. CX is everything that happens between a person thinking they'd like some coffee to the point where they take their first sip. From the brand and its reputation, to its social presence, to the store front, its location, the look and feel of the interior, the smell in the store, the music, the greeting customers receive, the process of ordering, the pricing, the packaging and finally the product itself — everything Starbucks wraps around the product allows them to charge $5 for a 50-cent cup of coffee.

Our businesses are the same. Our attractiveness and value to clients are determined as much by how we deliver our services as the services we deliver. Yet most wealth managers deliver a client experience akin to doctors providing a physical and ongoing checkups. They offer incomprehensible data and nothing but pain and sacrifice on the horizon for the patient. Hardly a recipe for success in the new world where people have more choices than ever.

4 keys to a winning client experience

Great consumer companies like Apple, Amazon, Netflix and Uber all share the same pillars to delivering a highly valued client experience. The pillars allow these companies to generate astounding profits and phenomenal growth to their owners. Our industry should be no different.

It's personal and interactive. Every one of the great service brands has learned the importance of creating an intimate and personal experience for its customers. They allow each client to buy and choose products on their own terms, in an individualized way. Whether it's selecting a hotel room or picking a seat on a plane, customers today expect to design their own services.

Unfortunately, most wealth managers don't give enough choices to clients around how they deliver the financial plan, how they invest and report, or how much they charge for different levels of service. Most are still giving their clients a complex plan, delivered in person, with one investment solution in boilerplate allocations, with one price. Using technology and gamification can make it all more interesting, unique and participatory.

Firms like Personal Capital and Wealthfront are empowering consumers and changing expectations today. For an independent firm, change begins with advisers willing to shift their role from being a pilot in control of a plane to being a coach helping a client to fly. It requires a new way of working and new tools. Empowering clients with the choice-making is the cornerstone of any successful CX in today's market and can make you an indispensable guide along the way.

It's immediately gratifying. We order an Uber and know exactly when it's coming. We rent a movie and watch instantly. None of that instant satisfaction is likely if you go to a typical wealth manager. It will be all about mathematics and sacrifice for some long-distant future. We still focus too much on money and retirement rather than the life that people want to live and what really matters to them right now. There's so little gratification.

Imagine instead if you were talking about how to ensure people are doing what matters today and measuring the impact you make on the way they make trade-offs and choices in their life right now. Here's an example: The most important priority across our 20,000 clients is for them to spend time with people they care about. Measuring whether they are doing that and discussing how they want to do that right now is not some distant promise, but an immediately rewarding moment.

It's on demand. Amazon has made office hours and geography obsolete. The new client experience has to be mobile, video-based and intuitive. That means using new tools, better systems, and a new work and office structure. Say goodbye to yellow pads, incomprehensible one-and-done financial plans and complex quarterly performance reporting.

And most importantly, it always feels as if it's worth the money. There's no doubt that consumers today have more choice, know more and are more demanding than ever. The old ways of delivering a client experience are simply not worth the 1% most advisers are charging compared to the alternatives.

How to be indispensable

The good Icons and Innovators understand they are ultimately all in the consumer experience business. They invest in understanding their clients and in research so that they are competitive. The great ones constantly evolve and have a commitment to iterate their CX to delight their clients with every interaction today and into the future.

Joe Duran is founder and CEO of United Capital. Follow him at @DuranMoney.


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