SHERISE MERCER

Head of Macquarie Virtual Adviser Network

Macquarie Group

With a wider choice of providers than ever before, today’s financial advice and accounting clients are informed, selective and increasingly demanding. 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 from 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.

The findings of the most recent Propensity Project Report 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, the survey focuses on ‘actual’ rather than ‘stated’ drivers. For example, 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

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 out of 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.

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 often put an expert on a pillar and take their advice without more robust scrutiny.

What does it mean for my practice?

The report explores four key dimensions of customer satisfaction: people, process, personalisation and perception of value – and the big shift is in the importance of personalisation.

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. See Chart 1.

How do we achieve this?

Well, managed accounts is a good start.

By using managed accounts to systematise administration and compliance tasks, advisers can free up time, which can be better spent on delivering a thorough and personalised experience to their clients.

It’s time to move the conversation from administration. Without managed accounts, the process to make changes to a client’s portfolio can be slow, cumbersome and require hours of back-office administration.

The process not only involves excessive paperwork, it can also mean that the vast majority of your client interactions are based around tedious paperwork concerns. The focus on stock selection and trade execution decisions can keep the client conversation at a more reactive level. The focus is usually on: ‘How are your investments performing?’, rather than the more strategic, and ultimately more helpful, ‘How are we tracking against your goals?’.

Managed accounts allow a more strategic focus. With managed account solutions, depending on whether you buy, partner or build, the investment process is either performed in-house or outsourced to fund managers or research houses, and the rebalancing is performed by the platform.

Regardless, you no longer have to spend time on stock selection or trade execution, enabling you to be more proactive and have more compelling conversations with your clients.

Managed accounts provide advisers with a different discussion and a different relationship with their clients.

Managed accounts can position you, the adviser, as a specialist, with time to provide holistic investment advice and have more strategic conversations. You’ll be able to help your clients make well-informed financial decisions aligned to their goals, creating a path to reach financial success and security in the future.

Sherries Mercer is Head of Macquarie Virtual Adviser Network at Macquarie Group.