Are RIAs failing their clients?

A recent study has found that registered investment advisors may be failing their clients when it comes to personalization.

The report, published by F2 Strategy, a fintech consultancy firm, suggests that RIA clients aren’t having enough input into designing what their advisory experience and service delivery looks like. That in turn could affect clients feeling unsatisfied with their advisory experience and may result in them unwilling to refer new business.

What are advisors doing to address the client experience and how are they keeping in tune with clients’ wants and needs?

Michael Dunham, director of planning and wealth advisor at Fontana Financial Planning says the firm does a lot of blog posting, video and content creation on their website, along with sending out monthly newsletters to all their clients and prospective clients. The firm also uses a program called Keap, that helps them to see what links are being clicked on the newsletters and what kind of material clients are interested in.

“We now know to tailor our content more towards what people are engaging with,” he said.

Dunham says even just taking the simple step of “having a conversation and asking clients, ‘What are you looking for that you feel like you’re not getting?’ has really allowed us to add a lot of value.”

Results from the study found 81 percent of RIA respondents believe a differentiated, user-friendly client experience is critically important, but 58 percent don’t do research or interface with clients to help design what that experience looks like.

Andrew Evans, CEO and founder of Rossby Financial says they’ve recently started utilizing Practice Intel, a growth platform, where clients can answer questions anonymously.  

“It’s giving [us] a much better overview of how all of my clients react to my advice, the client experience and the client engagement,” he said. Evans believes that, if the have the capital, advisors should work with a consumer company.

“Utilizing technology is great, but don’t overwhelm yourself with too many programs,” Evans warns.

Andrew Herzog, certified financial planner at The Watchman Group, says the study’s results don’t come as a surprise as clients “overwhelmingly believe a beautiful user experience differentiates advisors and leads to greater satisfaction,” he said in an email.

“Much of the financial industry is still stuck in the past with T+2 or T+1 settlement times, physical paperwork including statements and tax returns, and poorly designed client portals that look like they’re from the days of NSYNC.”

Herzog added that clients expect to access their portfolio reports, wealth and information via their mobile devices with clean website designs, keeping clients from feeling lost or overwhelmed. “An RIA that focuses on a user-friendly tech stack will make the client onboarding and client maintenance processes a breeze,” he said.

Herzog noted that choosing the right custodian, reporting software, financial planning software, and other digital tools is crucial for client retention. “Various studies suggest the average financial advisor is in his 50s, so it’s no surprise that many RIAs don’t even think to ask the client about digital user experience/communication because much of their career was analog,” he wrote.

Colin Day, financial advisor at Correct Capital, says when it comes to the client experience, he tries “to spark a thought” to his clients. Typically, these thoughts come from reminding clients of important events, like the upcoming federal election or tax season.

“We provided information about investing in an election cycle and, when there is a presidential cycle, how does the market perform? And when should our clients be worried?

“The touch points and the connection are very important but trying to prompt ideas into our clients’ heads about some of the things that they may not otherwise think of is another way that we’re trying to provide a deeper engagement.”

While most of Herzog’s clients aren’t discussing their experience with them beyond their investment performance and financial planning progress, he said they feel pretty tech-savvy and are proactively emailing regular newsletters to clients, redesigning client portal layouts, creating smoother back-office processes, and simplifying the onboarding process for everyone’s convenience.

Advisors who can “go deeper” are ultimately what Dunham believes clients are looking for from their financial planner.

“They’re looking for that one person that can help facilitate all of their financial life, not necessarily be an expert or expecting their financial planner to be able to design their estate plan, but expecting their financial planner to be well versed enough to be able to give good insight and opinions on how they can best align their estate plan with what their true goals and objectives are.”