An IBM (NYSE: IBM) Institute for Business Value study of more than 1,300 US wealth management clients reveals more than half (57 percent) are not advocates of their firms and over 40 percent do not consider their firm a "trusted advisor" to help them meet their financial goals. The study, "Building Client Advocacy: New Opportunities for Wealth Management Firms," comes at a time when firms are scrambling to differentiate themselves and meet changing consumer demands for new investment products and services, especially from a burgeoning baby-boomer population in its peak years of asset accumulation.
As part of the study, IBM deployed a unique measure of customer loyalty, the Customer Focused Insight Quotient (CFiq), to determine if a client considered themselves an advocate, antagonist or apathetic. [To view a copy of this study, visit www.ibm.com/gbs/wmcfe]
Only 43 percent of wealth management clients indicated they are advocates of their wealth management firm. These results should be disappointing to managers in an industry that defines itself by product and service excellence.
One out of every five wealth management clients (19 percent) is an antagonist -- meaning they have negative attitudes.
Another two of the five (38 percent) are apathetics. Such attitudes may be indicative of a failure on the part of the firm, despite likely investments in better products, improved channel experiences and sophisticated advisor programs.
Crucial areas in which apathetic clients scored key wealth management staff capabilities poorly: -- Understanding client needs -- Only 39 percent agreed that employees listen to them and understand their needs.-- Offering the best advice -- Just 36 percent felt that their wealth management firm has knowledgeable staff that offers good advice. -- Effective teaming -- Less than 32 percent felt that their wealth management firm's employees work effectively as a team to meet their needs. Clients seeking a wealth manager should focus on these three performance areas.
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