New Schwab Study Shows Why Clients Have Been Moving

Tuesday, July 3rd, 2012

Clients weren’t get­ting what they wanted, and they want to address more than the portfolio.

Charles Schwab recently released its 2012 sur­vey Inde­pen­dent Advi­sor Outlook/High Net Worth Investors Study. Among the data was an update on why peo­ple have been chang­ing advi­sors and how they found their new advisor.

Refer­rals con­tinue to be the sin­gle most impor­tant way clients con­nected with their new advi­sors, account­ing for over half of the clients who moved.

When it came to the rea­sons peo­ple moved, 66% said they didn’t get the kind of atten­tion or ser­vice they wanted from their prior advi­sor and 51% indi­cated that they wanted some­one to take a more holis­tic approach to their finances and invest­ments. This rein­forces other stud­ies that have shown that con­ver­sa­tions beyond the port­fo­lio drive client engage­ment. We would expect this to be espe­cially true in dif­fi­cult invest­ment mar­kets, but this study was com­pleted on Feb­ru­ary 3, 2012 – a time when the mar­ket was par­tic­u­larly strong.

It also indi­cates the impor­tance of get­ting sys­tem­atic client feed­back. While two thirds of the clients who moved indi­cated they were not get­ting what they wanted from their prior advi­sor, I do not believe it can fully be explained sim­ply by poor ser­vice. Rather, I sus­pect the ser­vice they received was not what they had hoped for or expected as opposed to inad­e­quate for infre­quent. Given that this is by far the most com­mon rea­son for peo­ple to move, com­pounded by the fact that we are in a volatile or declin­ing mar­ket, it makes more sense than ever to make sure that part of your ser­vice model includes client sur­veys or an advi­sory board.

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Tags: Accounting, Advisory Board, Charles Schwab, Client Engagement, Client Feedback, Client Surveys, Conversations, Declining Market, Driven Practice, High Net Worth Investors, Holistic Approach, Independent Advisor, Investment Markets, Investments, Moving, People, Portfolio, Referrals, Service Model, Two Thirds
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