Research from digital data provider Fenergo, which specialises in client lifecycle management for the financial industry, has shown that institutions could lose up to $10bn (£7.7bn, €8.7bn) a year simply by not listening to their clients.
Of the 250 chief executives surveyed, 36% admitted they have lost a client due to inefficient onboarding process, while 81% believe poor data management has negatively affected the customer experience.
“This report clearly shows the impact that client inefficiencies and a hesitancy to digitalise processes have on the customer experience and how it directly effects financial institutions’ bottom line,” said Marc Murphy, chief executive of Fenergo.
While this data mainly applies to the banking sector, International Adviser reached out to advisory firms around the world to determine the extent of this trend.
From IA’s analysis, financial advisers are far more aware of the customer experience than their counterparts in the banking sector, with firms having either established or recently introduced feedback mechanisms.
Tim Sargisson, chief executive at UK advisory firm Sandringham, said that the company has just set up a feedback system. “As a business, we are seven years old and 2019 will be the first year that we collect feedback from our clients. We have engaged an outside firm to facilitate and we are going to send out our survey when annual statements are being sent out to clients.”
While the number of customers completing the survey is not expected to be very high, Sargisson believes that the introduction of incentives could result in greater engagement. He predicts that the firm will get a 1% response rate through sending the survey out to every client.
Therefore, “it will also be important to incentivise responses, so we will offer vouchers. We will also like to provide a URL in the paper survey to an online link where clients can fill out the survey if they want to”.
In other parts of the world, advisers are required to ask for customer feedback; Kelso Beggs, executive director of Singapore-based AAM Advisory, pointed out.
“Client feedback is really important and definitely serves to save assets under advice. In Singapore, we are required to send questionnaires to clients as part of the Monetary Authority of Singapore’s ‘Balanced Scorecard Framework’; such as quality of advice received, disclosure provided etc.
“We take the required questions but also add our own to gauge the client’s experience of AAM to ensure we are on the same page as them, little things can make a big difference like them wanting quarterly valuations but us sending them monthly. We also use it for referral purposes, as clients who are very happy are likely to refer friends/colleagues.”
Others, like AES International in Dubai, openly display client feedback on screens around its offices, as well as on its website.
“This means everyone in the business is both aware and proud of the scores and comments we receive,” said Sam Instone, director of AES International.
“All our clients are sent this survey on their anniversary of becoming a client. Listening to feedback is critical to improving our services and we really enjoy this part of our client interaction.”
Evolving with clients
But why is it so critical to listen to clients?
It’s because “client expectations are constantly evolving”, according to Nigel Green, founder and chief executive of DeVere Group.
“By listening to and acting upon feedback from clients, we’re best-positioned to be able to consistently meet these expectations.
“It is, frankly, unsurprising that those financial institutions that do not listen to their clients lose money as they are, clearly, out of touch with their market.”