IPI Study: Advisors Think Their Service is Better Than Their Clients Do

Wednesday, July 6th, 2011

The Insti­tute for Pri­vate Investors released a study that, I believe, dis­closes some shock­ing sta­tis­tics. If you are con­cerned about attract­ing and retain­ing clients, the study is some­thing you must reflect on. Although Advi­sorOne some­how trans­lated the results into the head­line “Wealthy Investors Say They’re Hap­pier With Their Advi­sors” read­ing the study, Both Sides Now, set off alarm bells for me.

The lead sta­tis­tics is that 63% of ultra high net worth investors are fully sat­is­fied with their advi­sor rela­tion­ship. I don’t know what your high school expe­ri­ence was like, but any­thing below 65 was a fail­ure when I was there.

Shock­ingly, 95% of advis­ers said their clients are fully sat­is­fied. So, 32% of advi­sors think there clients are hap­pier than they really are. Is it any won­der we are dis­ap­pointed with the num­ber of refer­rals we get?

Rein­forc­ing that over­all sta­tis­tic, the study found, among other things, that 63% of investors agreed “my advi­sor pro­duces results in con­cert with my

family’s goals and risk para­me­ters,” with 17% dis­ap­prov­ing of their advi­sors’ per­for­mance. An SEI study I recently wrote about the impor­tance clients place on their advi­sors’ under­stand­ing their sit­u­a­tion and needs.  This spe­cific kind of fail­ure will lead pretty directly to los­ing the rela­tion­ship. Fur­ther, a sig­nif­i­cant por­tion of those investors do not believe their advi­sors are uti­liz­ing their full resources to the clients’ ben­e­fit or pro­vid­ing ade­quate access. If you are the advi­sor to one of those clients, your rela­tion­ship is at risk.

For­tu­nately, the study also iden­ti­fies the direc­tion to a solu­tion. “We are see­ing a clear trend toward engag­ing in more of a part­ner­ship with the advi­sor, a nat­ural evo­lu­tion as investors learn more about due dili­gence in the after­math of the finan­cial cri­sis,” reports Char­lotte Beyer, IPI founder and CEO. “Advi­sors have longer last­ing rela­tion­ships with investors who wish to be a part­ner in a dia­logue.” This rein­forces Julie Littlechild’s find­ing it Anatomy of the Refer­ral: when clients believe there feed­back is sought and imple­mented, they are more engaged, sat­is­fied, and loyal.

The mes­sage is clear – involve your clients in a dia­logue and dis­cover how they really feel about your ser­vice. If you can uncover client dis­ap­point­ment on how well you lever­age your resources for them, on access to you, or on the results to deliver, you have the infor­ma­tion you need to give them the expe­ri­ence they desire.

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Tags: Aftermath, Alarm Bells, Benefit, Beyer, Ceo, Due Diligence, Failure, Financial Crisis, High Net Worth Investors, Lasting Relationships, Natural Evolution, Partnership, Private Investors, Referrals, Relationship, Risk Parameters, School Experience, Shocking Statistics, Statistic, Wealthy Investors
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