New Client Research Uncovers Drivers of Engagement, Satisfaction, and Willingness to Refer
Investments & Wealth Institute®
Study Highlights Differences between good advisors with satisfied clients and exceptional advisors with engaged HNW clients
(formerly IMCA) released research findings
from their latest study, “2019 High-Net-Worth Investor Study,” today at the Annual Conference Experience (ACE) taking place this week in Las Vegas, NV. The research explores how advisors can stand out in a crowded market, where high client satisfaction and loyalty is not enough to set them apart. The study also examines how articulating the value of advanced, credentials can provide meaningful differentiation among discerning HNW Investors.
The research, fielded by AbsoluteEngagement
.com, gathered input from just over 1,000 high-net-worth investors across North America. The research built upon the findings of previous studies conducted in 2017 and 2018. Of the current study’s respondents, 578 investors reside in the United States and 425 are based in Canada. All respondents worked with a financial advisor and met specific household investable asset criteria (at least $500,000 in investable assets).
According to the survey, 91% of clients are somewhat or very satisfied and 89% of clients are somewhat or extremely likely to continue to work with their advisor. According the research, the vast majority of advisors are providing a high level of satisfaction with their HNW clients. While those findings are good, the research suggests that having satisfied and loyal clients isn’t enough to set the advisor apart from the vast majority of other advisors available to clients. The study highlights several key capabilities that distinguish exceptional advisors from their peers.
Drivers of HNW Client Engagement, Satisfaction and Willingness to refer
Not surprisingly, the foundational requirements of all client respondents are that their advisor is trustworthy (87% percentage rating 5 out of 5 on importance), has high ethical standards (80%), always acts in my best interests (80%), and is knowledgeable (77%). Beyond these foundational capabilities, the research identified four additional drivers that “engaged clients” rate significantly higher than all clients: In order of relative importance (from lowest to highest) they are: taking a personalized approach, demonstrating advanced capabilities, delivering exceptional service, and providing meaningful guidance.
“Client engagement is the key goal of every successful advisory relationships” said Julie Littlechild, founder of AbsoluteEngagement.com and author of the research. “However, advisors must first establish a foundation of expertise and ethics, the two most important things to clients beyond the over-arching attribute of trust. The study provides actionable steps advisors can take to communicate their value and measure their success.”
HNW Clients Rank Investment Management as the Most Important Service
At the highest level, high-net-worth clients turn to advisors to provide a range of services. When asked to rank four services in order of importance, investment management tops the list (38% of HNW clients rank it as most important), followed by financial planning (29%), wealth management (21%), and retirement solutions (12%). However, while investment management is most important, two-thirds of investors say that investment performance is just one of the things for which they pay their advisor. The top three things HNW investor say they pay their advisors for are: on-going guidance/advice to help reach their goals (90%), help in avoiding costly financial/investment mistakes (84%) and on-going monitoring of their goals (81%).
High-net-worth clients believe in the importance of voluntary designations for their advisors
With Ethics and expertise being ranked as foundational capabilities, and “strong technical expertise” and “advanced capabilities” being ranked as differentiating factors for exceptional advisors, the value and importance of designations were explored as an are the primary way that advisors demonstrate all of these capabilities. Seventy-three percent of high-net-worth clients say that designations and credentials are an important way to demonstrate technical expertise. In part this is because clients define expertise as going above and beyond the basic requirements of licensing or registration. Nearly 70 percent of high-net-worth clients saying it is important that their advisor achieve advanced certifications or voluntary education and three quarters of high-net-worth clients say that voluntary designations and certifications would be important to decision making if they were choosing an advisor today.
“High-net-worth clients expect their advisors to have advanced ethics and expertise to drive tangible outcomes,” said Sean Walters, CAE, chief executive officer, Investments & Wealth Institute. “This study illustrates that for high-net-worth clients, advanced capabilities mean knowledge and application of strategies and expertise they could not get from other advisors. Voluntary, advanced designations provide those capabilities.”
Communicating Ethics and Expertise: Aspects of Professional Designations that are Most Important to Clients
Clients have low unaided awareness of all professional designations. When communicating with clients and prospects about designations, there are specific messages that are more important than others. The following were identified as the most important aspects of how an advisor obtains his or her designations.
- My advisor would lose his/her credentials if he/she failed to meet ethics standards. (89% said this was important)
- My advisor must meet ongoing standards in order to maintain his/her credentials (e.g., annual continuing education, adherence to ethical standards). (89% said this was important)
- My advisor met a rigorous set of standards to be certified (e.g., ethics, experience, education, examinations). (87% said this was important)
Drawing on the findings of the study, Investments & Wealth Institute created an online program Exceptional Advisor® Communicate Your Value and Build Client Engagement. Consisting of 5 modules, the program is designed to provide advisors a better understanding of what clients consider important, provide meaningful guidance, demonstrate advanced knowledge through credentials, and highlight a commitment to ethics. Consisting of webinars, videos, and readings, the program teaches advisors how to develop client communication and action plans. In addition, the Institute has developed an Exceptional Advisor® Toolkit
, available to Institute members and CIMA®, CPWA®, and RMA® certificants. The toolkit provides an array of client and advisor resources.
To access the study or learn more about the Institute, click here
About the Investments & Wealth Institute®
Established in 1985, the Investments & Wealth Institute, formerly IMCA, is a professional association, advanced education provider, and standards body for financial advisors, investment consultants, financial planners, and wealth managers who embrace excellence and ethics. Investments & Wealth Institute administers three certifications, Certified Investment Management Analyst® (CIMA®), Certified Private Wealth Advisor® (CPWA®), and Retirement Management Advisor® (RMA®). Through its publications, live events, online courses, assessment-based certificate programs, and advanced certifications, the Institute delivers premier-quality, practical education to advanced practitioners in more than 38 countries.
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