Do you know what your clients really want?

How to convert goodwill into business success

With a wider choice of providers than ever before, today’s financial advice and accounting clients are informed, selective and increasingly demanding. So what does it take to nurture closer client relationships and convert goodwill into long-term business success?

Each year, Macquarie conducts in-depth analysis of around 1,500 clients across its Virtual Adviser Network (VAN) – a group of high performing specialist and multi-disciplinary firms across Australia – to reveal the key drivers behind client engagement. The robust survey digs behind the customer satisfaction headline to look at what drives propensity to recommend, stay and increase share of wallet.

According to the Head of the Macquarie Virtual Adviser Network, Sherise Mercer, the findings of the most recent Propensity Project give advisers and accountants plenty of food for thought in terms of what customer-facing actions will move the dial to improve business outcomes.

Importantly, she says the survey focuses on ‘actual’ rather than ‘stated’ drivers.

“If you ask clients directly about fees, people will tell you that’s important. However, if you look at client behaviour, in comparison to other attributes or drivers, fees have a very low propensity to drive satisfaction.”

Top 5 drivers of satisfaction

The survey found the top factors that actually drive satisfaction, across all ages, are:

1. My adviser manages my portfolio for best risk and return outcomes

   Mercer says this is not surprising as it talks to the heart of why people go to a financial adviser in the first place.

   “This is a table stake for advisers, demonstrating how important it is to link what you do back to a client’s goals and strategy. It’s not so much about absolute returns, but about getting the balance right.

   “Clients want you to understand them as a person – what’s important, what they’re trying to achieve in life, their appetite for risk and how to manage their fears. This finding tells us that an adviser’s primary role is to truly understand what will drive confidence in and comfort with their clients.”

2. I receive the right level of information about my progress

   “Over the last six years, this has become increasingly important. Communication usually falls in the top 5-7 drivers. But now getting the frequency, quality and clarity of that information right has become an even greater priority. The baseline is making sure your clients aren’t waking up in the middle of the night because they don’t know what’s going on.”

   She says this driver becomes even more important as people approach the end of their earning capability years. “People want to know: ‘Will I have enough to live on? Will I run out of money?’ The key is to make sure people have enough information to be confident about how they’re tracking towards their goals.”

3. My adviser identifies my needs and connects me to other experts as required

   “This is another driver that’s been coming up the list over the last few years. As people become increasingly time poor, clients expect to have a single relationship with one adviser who takes a macro view of what needs to happen to protect their financial wellbeing.

   “Clients typically don’t understand the regulatory framework, so they don’t really distinguish between tax advice and wealth management. They want advisers to take a holistic view of their needs and either provide everything or recommend someone in their network to fill any gaps.

   “There’s a real risk of dissatisfaction if an adviser or accountant just does their bit, without taking into consideration the client’s broader goals and financial situation.”

4. My adviser proactively manages my affairs

   “Clients want to be more than a number. They expect advisers and accountants to look out for them, understand their changing needs, think about what’s coming up and get ahead of it.

   “Client relationship management has moved from pulling out the file once a year to proactively checking in based on life events (buying a house, saving for a big trip, planning a wedding) or even just regular ‘health check’ contact to ask: ‘Is there anything I need to know?’ It’s a simple thing to schedule, but it will make the world of difference to how valued the client feels.”

5. My adviser helps improve my financial knowledge

   “This driver is particularly relevant for younger clients (under 46) in the accumulation phase. These clients don’t necessarily want a detailed explanation of how the share market works, but they do want to get a handle on how best to structure their financial life.

   “There’s a real appetite in younger generations to take personal responsibility for achieving their goals. They want to understand their options and participate by actively considering different strategies with their advisers. It’s a distinct generational change from many retirees who can put an expert on a pillar and take their advice without more robust scrutiny.”

What does it mean for my practice?

Mercer says the big shift is in the importance of what she describes as the ‘4Ps’: people, process, personalisation and perception of value.

“This year, for the first time, four out of the top five drivers are around ‘personalisation’: an adviser’s ability to customise the entire client relationship. So, this is where you’re going to get a real uplift in engagement. It’s all about giving clients a truly personalised experience based on their needs and goals and being proactive around communication and regular check-ins to build a trusted relationship. There’s a real opportunity for firms to refocus on the client experience to deliver what clients really want.”

From the Propensity Project