Client Affairs

Report Indicates Drop In Advisor-Client Levels Of Engagement

Eliane Chavagnon, Editor - Family Wealth Report, June 5, 2014

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A new report analyzing trends in client engagement - the standard for measuring the quality of the relationship between advisors and their clients - has found that only 25 per cent of clients are “engaged,” down 2.7 per cent from 2013.

A new report analyzing trends in client engagement - described as the standard for measuring the quality of the relationship between advisors and their clients - has found that only 25 per cent of clients are “engaged,” down 2.7 per cent from 2013.

According to The Rules of Engagement: 2014 Report by AssetMark and Advisor Impact, 36 per cent of clients are “content,” 18 per cent as “disgruntled” and 21 per cent are “complacent.”

Frequency of contact, value of review meetings and managing expectations are among the activities and attributes that drive advisor-client engagement, the firms said.

Other significant findings include that only 27 per cent of clients are “very clear” on what their lives will be like during retirement, while 58 per cent are “reasonably clear.” Meanwhile, 85 per cent of engaged clients said their advisor has explained the level of service they can expect, compared to 59 per cent of disgruntled clients, highlighting the value of communication.

Engaged clients are also more likely to have a written financial plan, at 64 per cent versus 42 per cent among content clients and 34 per cent among complacent ones. They are also more likely to say that their advisor works with them to manage wealth across generations.

The drivers of client engagement have been relatively consistent since 2008, noted Julie Littlechild, president of Advisor Impact. “However, advisors must not only know how to identify these drivers, but also how to find ways to implement them in their businesses in very tangible ways,” she said.

“We believe that client engagement is the most critical metric for advisors and for the industry. It reflects the client experience and the advisor's growth potential, as ‘engaged’ clients are among the most satisfied and loyal, and the most likely to drive referrals to the advisor,” said Matt Matrisian, senior vice president and director of Practice Management at AssetMark.

The report says there is significant opportunity for advisors to boost client referrals among engaged clients - those who are more loyal and are less fee sensitive.

The report is based on a survey of 1,200 respondents across the US.  

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