Month: March 2012

Client Evolution

We all know that clients want a unique and individualistic experience. But sometimes, tried and true practices just stop working. Many clients have come to the inevitable conclusion that the trust they placed in professional relationships, whether they be accountants, lawyers, doctors and financial professionals, is now a little less deeply ingrained and secure. Clients are becoming guarded and more activist in their approach and expectations.

Technology is permeating all aspects of people’s lives such that it is becoming a cornerstone of their financial lives as well. Just as doctors have had to adapt to the fact that many patients are self-diagnosing and expect to be a part of the decision making process when seeking treatment, so it will evolve for the investment community. The days of clients being told what to do and then blindly accept recommendations are coming to an end.

All clients want value for every dollar they spend and for some time the investment industry has been able to thrive with complex and less than transparent fee structures regardless of the investment vehicle. Regulators are working hard to alter this structure and in the not too distant future transparency will be the new world order. Today’s clients know more, expect more and plan to pay less. At the end of the day, clients want the best possible outcome and they expect their advisor to help them achieve that. New and more sophisticated clients want advisors to be free from conflict and have transparent and straightforward answers to questions. The role of their financial adviser should be to guide, advise objectively and be responsible for their recommendations.

Advisors have to become more client centric and not simply replicate what has been done in the past. They will have to change how clients receive financial advice and investments. Advisors will have to create a client experience that is customized with the client being part of the design and implementation of the investment plan. Clients are no longer comfortable simply being passengers, they want to be in the pilot seat. In order for this to occur advisors must educate and encourage participation by designing an interactive and personal solution for clients. Advisors must be true and honest guides that work with their clients and help them to make good decisions.

Advisors will be forced to focus on simplification and innovation, leaving complex products and services at the wayside in order to create a client experience that is far more understandable, meaningful, measurable and tangible. They will need investment firms that create and provide pioneering investment solutions to help clients to thrive in different market environments while focusing on attaining the best possible outcome. Technology and systems will need to revolve around servicing the client. Advisors can profitably deliver a unique experience by concentrating their services, focusing on their core competency and looking for supplementary specialized suppliers who can round out their service offering.

The world is getting smaller and in order to grow advisors will need to create a strong client community, linked together by technology and a customized client experience. For advisors who aspire to sustain and grow their business, the path ahead requires an emphasis on education and individualized attention to their most important asset, their clients.