How to build enduring client relationships

New research reveals what drives satisfaction in financial advice and accounting clients

The line between the financial advice and accounting disciplines is becoming increasingly blurred, with multidisciplinary advice firms becoming more prevalent. How can these two professions better deliver on client satisfaction? According to Macquarie’s most recent in-depth analysis of almost 1,500 end clients of advisory and accounting firms in its Virtual Advisory Network (VAN), people do not necessarily distinguish between different types of firms when it comes to who looks after their financial affairs.

The Propensity Project, which looks at end-client satisfaction in high-performing specialist and multi-disciplinary firms, had similar overall findings for both financial advisers and accountants.

Almost three-quarters (74%) of accounting clients and 70% of financial advisers’ clients rated their advisers at 9 or 10 out of 10. That resulted in very high average satisfaction scores for both groups: 8.99 for accountants and 8.84 for financial advisers.

However, Head of the Macquarie Virtual Adviser Network, Sherise Mercer, says the survey also revealed some telling differences in the ratings for individual service attributes.

“We found accountants tended to perform slightly better than financial advisers on people attributes (such as communication style and confidence) and process attributes (such as response times and speed and efficiency of implementation). Whereas, clients tended to rate financial advisers more highly for identifying their needs and connecting them to experts (83% versus 77%), and helping them improve their financial knowledge.”

These results may reflect the difference in expectations and use of the different disciplines. For some clients, accounting can be seen as a more ‘transactional’ interaction where competency, efficiency and clarity are prized. Whereas clients often view their engagement with a financial planner as an open-ended and deeper relationship, with expectations of a personalised approach that meets their specific needs.

Mercer says that, looking ahead, depth of relationship will be increasingly important for both disciplines. “Personalisation has become a defining driver of customer satisfaction. Last year, for the first time, four out of the top five drivers of customer satisfaction centred around personalisation – rather than people, process or perception of value.”

What do your clients really want?

Relationship trumps technical ability

She says the primary role will land with the professional who becomes custodian of the client’s life story.

“It’s about the relationship – not just technical ability. In recent years, it’s become increasingly difficult to outperform the market, with SMAs, ETFs and other passive style investments becoming main stream. Increasingly, the new differentiator is to deliver a truly personalised, client-centric experience.”

“Our survey found that personalisation in financial advice practices is very strong. This tends to be because advisers focus on the future and help people plan how to reach their life goals – both short and long term. Clients tend to choose advisers based on emotional factors: Do I feel this person completely understands my needs? Clients tend to select accountants initially for their ability to perform a transaction efficiently and effectively.

“The point is, both types of service are needed. But practices will benefit from adapting to the new client preference to have one primary relationship with an adviser or accountant who takes a macro view of what needs to happen to protect their financial wellbeing.”

First contact is critical

Mercer says that, particularly with small business owners, accountants are often the first point of contact.

Moving towards a multidisciplinary advisory practice

“We see a clear opportunity for accountants to delve into a client’s broader needs and be more focused on the future. Already, many accountants are responding to this need by building wealth capabilities within their own business or partnering with other firms or advisers to provide a holistic offering covering all elements of financial wellbeing.”

“By the same token, advisers are entering into referral arrangements with accountants, where the wealth adviser retains the primary relationship. We’re seeing more formal partnerships, including joint ventures, with more sophisticated packaging around a total financial services solution. In either case, to make these models work, advisers need to be able to effectively identify accounting needs ahead of time.”

Tips for integrating accounting and planning

What do different clients expect from their financial firm?

Looking ahead, both advisers and accountants need to identify their core customer segments and tailor their services accordingly. To this point, Mercer says that customer preferences tend to split along age lines.

“For example, older clients tend to value the softer skills; whereas, younger clients in the accumulation phase have a desire to be a more active participant in the process.

• <46 years old

  “These clients want you to spend time explaining how best to structure their finances to achieve their goals and to connect them to other experts. They demand respect and, initially, are largely looking for performance outcomes as proof of the value you deliver. In time, as you build a strong relationship, they will require less ongoing proof that you are looking after their needs.

• 46-60 years old

  “In the lead up to retirement, clients need reassurance that they are on track. They are aware they have a finite amount of time to accumulate enough to retire on and still have a good lifestyle along the journey. Their focus is getting to the right place at the right speed with the appropriate amount of risk.”

• >60 years old

  “More than any other segment, older clients value professionalism and integrity. With these clients, the consequences of poorly managed risks are more severe. They need to be confident their money is safe because they cannot earn it again.”

Increasing convergence and collaboration

Mercer says that, as the industry moves to more of a relationship-based model, and with the increase of converged or multi-disciplinary offers, the lines between professions, at least from the client’s point of view, will only become more blurred.

“Focusing on personalising the client experience will enable all advisers to build strong, long-term relationships. Accountants and advisers will be able to uncover more of the client’s unmet needs – and then work closely with other internal and external experts to deliver a seamless advice experience.”

From the Propensity Project