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Driving Engagement; Driving Growth
Adviser ImpactDriving Engagement; Driving Growth 1
At Adviser Impact, we help advisers get back to basics – building deeper relationships and growing their
businesses. When we strip away the complexities of the market, the regulatory environment and the day
to day noise, these are the primary goals in any successful business.
And while the goals are simple, achieving them is not always obvious. For that reason, we conduct
on-going research among both consumers and advisers to understand:
• what drives client engagement and how advisers can use that information to build deeper and more
profitable relationships;
• how consumers perceive the value of advice and the implications of those perceptions for advisers;
• what consumers need, want and expect and how that impacts the adviser’s offer and service plan; and
• how consumers view referrals and what advisers can do to leverage client engagement to grow their
businesses.
This white paper is the third in a series, drawn from a large study among consumers of financial advice
from across the country. It is focused on the fundamental question of what is driving engagement and the
implications for advisers in running a great business.
We invite you to review the other white papers and a full summary of the research by clicking here. The
link will take you to the Vanguard Asset Management site to download the reports. Without their support
this research would not have happened; I thank them for their important contribution to the industry.
I would encourage you to take some time away from the business as you read this information. And
where you are tempted to skim over sections, think about if and how the drivers are engagement are
demonstrated in your business and where there is room for improvement. In addition to knowing you are
delivering an outstanding client experience, the economic benefits of client engagement are extraordinary.
It is worth the effort.
Julie Littlechild
President, Adviser Impact
www.adviserimpact.co.uk
Adviser ImpactDriving Engagement; Driving Growth 2
About Adviser Impact The research was conducted by Adviser Impact, a research and training firm dedicated entirely to
helping advisers ignite more engaged and profitable client relationships. In addition to conducting client
engagement research in the United Kingdom, Canada and the United States, Adviser Impact has surveyed
more than 100,000 consumers on behalf of financial advisers through its Client Audit programme. For
more information on the company, you are welcome to visit www.adviserimpact.com
About the ResearchThis white paper is based on a study conducted in partnership with Vanguard in September/October, 2011
via online survey. The study includes input from 601 investors across the United Kingdom, all of whom
work with a financial adviser, make or contribute to the financial decisions in the household and meet
specific asset criteria. Results are accurate with a margin of error of +/- 4.0%.
About the Participants The Economics of Loyalty is a body of research conducted every two years in three countries: the United
Kingdom, Canada and the United States. The study is designed to understand your deepest and most
profitable clients and help advisers to drive both engagement and growth.
0%
20%
40%
60%
£25k -£99k
£100k -£249k
£250k -£499k
£500k -£999k
£1M -£4.9M
£5M +
Total Household Assets
Perc
en
tag
e o
f R
esp
on
den
ts
10%
40%
25%
17%
7%
1%
Adviser ImpactDriving Engagement; Driving Growth 3
A Higher Standard: Client Engagement
Engaged clients represent an adviser’s deepest and most profitable relationships. They sit at the
intersection of what is best for the client (because they are highly satisfied with the client experience)
and what is best for the adviser (because they actively contribute to the growth of the business through
referrals). As a result, they represent a new standard, something beyond satisfaction.
Traditionally, we think of high satisfaction as the ‘gold standard’ for client relationships. However, client
satisfaction is not tied to growth and does not tell us a great deal about the quality of relationships.
Through a process called cluster analysis, we grouped consumers based on the strength of three
factors: satisfaction, loyalty and referrals. The clusters represent four categories of clients: Disgruntled,
Complacent, Content and Engaged.
Satisfaction/Loyalty
Referrals
Disgruntled16%
Complacent30%
Content39%
Engaged15%
Adviser ImpactDriving Engagement; Driving Growth 4
There are almost equal proportions of clients who are highly engaged and who
are disgruntled, the least satisfied and loyal. The proportion matters a great deal
because while disgruntled clients can be a net drain on growth (due to the threat
of attrition), engaged clients are the greatest source of potential growth. The
good news is that, based on this research, the growth potential of an engaged
client outweighs the potential that a disgruntled client will leave by a factor of
nearly 2:1. Why? Because when a disgruntled client leaves they typically take only
their own business elsewhere (unless, of course, they are negatively influencing
others). However, when a client is engaged he or she refers, on average, 2 clients
per year (1.94 to be exact).
Our focus, in this paper, is on the engaged clients, examining how we can engage more clients and how
we can leverage those that are already in that category. An observation on complacent clients, however,
may be in order. It could be argued that complacent clients represent a higher flight risk than disgruntled
clients. While the former are less likely to say they plan on leaving their adviser, they have, in many ways,
shut down. By way of example, disgruntled clients are more likely to say that they want to be asked for
their feedback on service. They have some fight left in them. Complacent clients may simply have given
up. Either way, nothing short of content is acceptable for any adviser hoping to create an outstanding
client experience.
Engaged clients are, by any definition, great relationships. The chart below tells the story. They are the
most satisfied, the most loyal and are driving referrals in the business.
Engaged clients are not only the most satisfied and loyal, but they provide virtually all referrals. In fact,
they don’t just provide one referral. Thirty-six percent of Engaged clients provided one referral, 41 percent
provided two referrals, 19 percent provided three referrals and 4 percent provided four or more referrals.
It is also important to note that Engaged clients recognise the value delivered by their adviser, relative
to the fees paid. In an industry which is undergoing a seismic shift with respect to fees, nothing is
more important than value, particularly during a down market. When clients think about fees, they are
Engaged clients
will drive most
of the future
growth in your
business.
0%
20%
40%
60%
80%
100%
Very satisfied(9 or 10)
Very loyal(5 out of 5)
Provided a referralin last 12 months
Perc
en
tag
e o
f re
spo
nd
en
ts
5%
40%
58%
30%
0%
30%
74%79%
4%
20%
100%
0%
Disgruntled Complacent Content Engaged
Adviser ImpactDriving Engagement; Driving Growth 5
Engaged
clients
recognise
the value of
advice.
Q. How would you describe the value that you receive from your adviser, relative to the fees paid? (a 5-point scale where 1 is completely disagree and 5 is completely agree)
comparing to value. The fact is that engaged clients are more likely to see higher value
relative to fees – somewhat more likely than content and dramatically more likely than
disgruntled and complacent.
Based on this information, it is clear that engagement matters. It matters because it sets a high standard
with respect to service and because it is directly tied to growth.
Taking ActionThe challenge, once we have identified the importance of engagement, is two-fold. How do we drive more
engagement and how do we leverage engagement to drive growth? The latter was specifically addressed
in another white paper entitled ‘Driving Growth through Client Referrals’. This paper focuses on how you
can drive deeper and more engaged relationships.
In order to understand engagement, we sought to understand what sets engaged relationships apart from
other relationships. When we compare engaged clients to disgruntled clients, it’s fair to say that they differ
in almost every aspect of the relationship. What does not typically differ—at least not as much—is what
is important to clients. By and large, investors are looking for many of the same things in an adviser, no
matter what their past experience, their wealth profile or their age. Topping the list of important attributes
are such things as trust, reliability and competence.
Top 5 factors based on importance Rating out of 5
Working with an adviser who is trustworthy. 4.71
Working with an adviser who is reliable. 4.59
My adviser has good knowledge about investment products and services. 4.60
The accuracy with which my account is handled. 4.52
My adviser fully understands my goals for the future. 4.46
The question is: what sets an Engaged client apart, even from a Content (and otherwise very satisfied)
client? What takes someone from “happy but passive” to actively helping you grow your business? We
turn to that challenge in the balance of this paper.
0%
20%
40%
60%
80%
100%
5%
Disgruntled
53%
Complacent Content
79%
66%
Engaged
Perc
en
tag
e o
f re
spo
nd
en
ts, ra
tin
g a
4 o
r 5
ou
t o
f 5
Adviser ImpactDriving Engagement; Driving Growth 6
Client Engagement Roadmap
In order to put the findings related to driving engagement in practical context, we have created the Client
Engagement Roadmap – a plan to help you focus in on those things that help drive profound engagement
while taking a path that reflects your specific priorities. The map below shows the tactical path to
engagement. It starts with client feedback (Partner), which provides the insights to help you define your
ideal client (Fit), map out a meaningful client experience (Connect) and demonstrate true value (Lead).
The Roadmap was developed based on those aspects of the client experience that set Engaged clients
apart (Partner, Fit, Connect, Lead) and then broken down into the specific activities that will help you
execute.
Define feedbackobjectives
Choosemethod
Craftquestions
Gatherfeedback
Communicateresults
Fit Connect Lead
Define yourideal
Set minimumstandards
Createassessment
process
Define processfor prospectswho don’t fit
Define processfor clients who
don’t fit
Segmentclients
Define/structure
service offer
Analyzecapacity
Communicateplan
Trackperformance
Define yourrole with clients
Refine reviewprocess
Communicateprocess to
clients
Profound Engagement
Partner
Adviser ImpactDriving Engagement; Driving Growth 7
Partner
Partnership is defined as giving clients a voice and inviting their input through feedback. Feedback creates
a sense of ownership among clients and can create a greater sense of personal control – something every
client needs when thinking about their finances.
Engaged clients are more likely to have been asked for their input on the service being provided.
While Engaged clients are more likely to have been asked for feedback, Disgruntled clients are looking for
the opportunity. More than half of Disgruntled clients feel it is important to be given the opportunity to
provide feedback, no doubt based on their service experience. Setting the most dissatisfied clients aside,
Engaged clients stand out, relative to Content or Complacent in the importance they place on feedback.
0%
20%
40%
60%
80%
100%
27%
Disgruntled
51%
Complacent
43%
Content
60%
Engaged
Perc
en
tag
e r
esp
on
din
g ‘yes’
Q. Has your financial adviser ever asked you for feedback on the service that he or she provides?
Q. How important is it to you that your adviser asks you for feedback/input on the service that he or she provides?
0%
20%
40%
60%55%
Disgruntled
43%
Complacent
42%
Content
53%
Engaged
Perc
en
tag
e r
esp
on
din
g ‘yes’
Adviser ImpactDriving Engagement; Driving Growth 8
When asked if feedback makes a difference, Engaged clients are optimistic that they are being heard and
Disgruntled clients do not believe they can impact the relationship. Engagement is not only linked to the
activity of asking for the feedback, but to the extent that advisers listen and respond to that feedback.
Partnership: Taking ActionImplementing a process to gather—and then actively use—client feedback is a
foundational step as it provides the insights you need to ensure that your plan is
meaningful and consistent with client expectations.
Activity Action Step
Define feedback objectives
Clearly define what you hope to accomplish through client feedback, which might include: demonstrating commitment, assessing satisfaction, understanding what is important to clients, refining your service offer, streamlining service delivery and increasing revenue or referrals.
Choose methodBased on your objectives, choose the most appropriate method to gather feedback. Those might include: written/online surveys, advisery boards or informal requests for feedback.
Craft questions
Create or select the questions that specifically align to your goals and are appropriate given the method you are using. Consider including questions that cover: satisfaction, priorities, service expectations, interest in additional services, comfort referring and other profile information.
Define processDecide if you will outsource your survey, then create a clear process and timeline.
Communicate results
Determine how you will follow up as it may impact what questions you ask. Consider a follow-up letter to all clients and addressing feedback directly during your next review meeting.
0%
20%
40%
60%
80%
Perc
en
tag
e o
f re
spo
nd
en
ts
Some difference A lot of difference
Disgruntled Complacent Content Engaged
15%
35%
18%
37%
29%
36%
48%
25%
Q. How would you describe the difference that providing that feedback made in helping your adviser shape the service that he or she delivers?
Adviser ImpactDriving Engagement; Driving Growth 9
Fit
A majority of advisers report that ‘fit’ is somewhat or very important1, making the argument that if the
fundamental ‘fit’ is wrong, then there is little chance that a client will become engaged. The data shows
that clients also consider ‘fit’ to be important, with similar communication styles at the top of the list. The
chart below shows how clients rated the importance of different aspects of fit with their adviser.
Fit: Taking ActionWhile fit is clearly important for both clients and advisers, many advisers do not have a
clear process in place to assess fit. The action plan below is designed to help you think
about how you can define your ideal client and then connect that definition to your new
client on-boarding process.
Activity Action Step
Define your ideal client
Ensure that your definition of the ideal client captures all of those things that not only drive profitability but which you value the most.
Set minimum standards
Review your ideal client list and determine which are non-negotiable and which are “nice to haves”. If something is non-negotiable, you should have a defined standard when it comes to accepting new clients.
Create assessment process
Create a list of questions that will allow you to assess fit on those things that are non-negotiable.
Define process for prospects who don’t fit
If you are committed to saying ‘no’ when faced with a client who is not a perfect fit, decide in advance how you will communicate that and if/how you will help the client find the right solution.
Define process for clients who don’t fit
Consider your existing clients and determine if some do not fit. If so—and if you cannot see a way to create fit—then determine if/how you will transfer those clients to another adviser, where the fit may be better for both adviser and client.
Q. How would you rate the following aspects of fit in an ideal advisery relationship?
0%
20%
40%
60%
80%
100%
45%
13%
54%
20%
54%
35%
54%
15%
Sharedvalues
Personality EmpathyCommunicationstyle
Perc
en
tag
e o
f re
spo
nd
en
ts
Somewhat important Critical
1 Adviser Impact/Vanguard, Driving Client Engagement, 2012
Adviser ImpactDriving Engagement; Driving Growth 10
Connect
On average, Engaged clients both expect and receive more plan/portfolio reviews in a 12-month period.
Content and Engaged clients have similar wealth profiles so the difference in contact is not tied to the size
of the portfolio. The quality of the Engaged relationship, however, is different; they differ dramatically from
other clients as it relates to helping clients with the ups and downs of the market, defining long-term goals
and creating a clear plan for the future.
Connect: Taking ActionConnection is ultimately about crafting and delivering a client experience that is
meaningful to clients, based on their needs and expectations. That service plan must
also be profitable for your business.
Activity Action Step
Segment clients based on value
Design, refine and maintain a segmentation process that reflects the full value of your client relationships, which might include: assets, revenue, potential, referrals and time required to service.
Define/structure service offer
For each client segment, define: the range of services that you provide, frequency of contact, educational support and appreciation activities.
Assess capacityDo the math, taking into account the number of clients you have, the service standards you have set and the resources you have in place.
Communicate plan
Map out service standards and then create a formal process to share those with clients so that they are clear on what they will receive and you have reinforced that value time and again.
Track performance
Automate a process to be able to check that contact goals have been met, with a focus on using technology.
0%
20%
40%
60%
Number of reviews per year
Content EngagedComplacentDisgruntled
Perc
en
tag
e o
f re
spo
nd
en
ts
31%
25% 24%
13%
32%
41%
50%
45%
39%
10%
21%
17%
3%
9%
27%
14%
Once Two or three times Four or more times Did not meetwith adviser
Q. Thinking about the last 12 months only, how often did you actually meet with your adviser (either face-to-face or by telephone) to review your financial plan or portfolio?
Adviser ImpactDriving Engagement; Driving Growth 11
Lead
Leadership, particularly during turbulent markets, plays an important role in
engagement. Seventy-six percent of clients say that leadership is important in a
relationship with a financial adviser. This need for a strong leader in their financial
lives cuts across demographics, including wealth profile and age.
While it is the most intangible of the engagement drivers, leadership is,
nonetheless, critical. It is primarily demonstrated during the client review and the
extent to which you focus clearly on the needs of the client, face up to the most
difficult situations, provide reassurance as needed and keep your client focused
on making the difficult decisions he/she may need to make to secure an ideal
financial future.
However, this attribute is also linked to being ‘proactive’ which ties back to the fundamentals of client
contact, defining service standards and communicating those clearly so the client understands your
process and knows that you are focused on their plan even when they are sitting across the desk at a
review meeting.
More than three-quarters of Engaged clients see their adviser as a strong leader, most often described as:
• Helping keep a plan on track despite turbulence
• Keeping clients focused on the long term
• Actively reviewing plans in the face of a market downturn
Leadership is also demonstrated by the role an adviser plays in the role of a client’s life, which goes beyond
investments for the most engaged clients. Based on the data, there are three ways in which advisers can
practically demonstrate leadership, either because they are focusing on the issues which are most critical
to clients or because they are playing a role that puts them in the position of “trusted adviser”. The three
elements described on the following pages reflect ways in which an adviser can demonstrate leadership.
76% of clients
say that
leadership
is somewhat
important or
critical.
0%
20%
40%
60%
80%
100%
14%
Disgruntled
56%
Complacent
58%
Content
77%
Engaged
Perc
en
tag
e o
f re
spo
nd
en
ts
Q. Do you consider your adviser a strong leader?
Adviser ImpactDriving Engagement; Driving Growth 12
1. Engaged clients are more likely to put their adviser in the role of ‘trusted adviser’.
Most high net worth clients have complex financial needs and work with a
variety of advisers—including accountants and solicitors—in delivering those.
And most look for one of those professionals to play the lead role – the one
trusted adviser who understands the full financial picture. Engaged clients are
more likely to say that their adviser plays that role.
2. Engaged clients are more likely to have a financial plan
An indication of the depth of the engaged relationship is the extent to which
they buy into the financial planning process. For many advisers this will be
an indication that they are focused on all aspects of their financial lives, a
further sign of the depth of the relationship. Ninety percent of Engaged clients
say the plan is somewhat important or critical in helping them reach their
financial goals.
Engaged clients
see their adviser
as their most
trusted adviser.
Engaged clients
receive more
holistic planning.
Q. Which, if any, of the following best describes the role that your financial adviser plays relative to other professional advisers with whom you work (e.g.: accountant or solicitor): in my financial life, coordinating or working with my other professional advisers as and when required.
0%
20%
40%
60%
10%
Disgruntled
16%
Complacent
30%
Content
34%
Engaged
Perc
en
tag
e o
f re
spo
nd
en
ts
Q. Do you have a written financial plan which may include insurance, tax planning, retirement planning, estate planning or some combination of these items?
0%
20%
40%
60%
29%
Disgruntled
38%
Complacent
43%
Content
59%
Engaged
Perc
en
tag
e o
f clie
nts
wit
h a
wri
tten
pla
n
Adviser ImpactDriving Engagement; Driving Growth 13
3. Engaged clients work with their adviser on a multi-generational basis.
Engaged clients are twice as likely as content clients to bring their families
into the relationship, a clear indication of a deeper trust and a driver of
longer-term profitability.
Lead: Taking Action
Activity Action Step
Define your role with clients
Clearly define the role you will play with clients as it relates to their financial lives, considering the scope of your role across other professionals and the family as well as how you would define strong leadership.
Refine review process
Refine the client review to ensure you are actively focusing on the relationship in addition to the plan or portfolio.
Communicate process to clients
Communicate your role and your process for focusing on the relationship so that clients recognize the importance you place on leadership.
Engaged
relationships
cross
generations.
0%
20%
40%
60%
4%
Disgruntled
6%
Complacent
10%
Content
24%
Engaged
Perc
en
tag
e o
f re
spo
nd
en
ts
Q. Does your primary financial adviser work with other immediate family members other than yourself and/or your spouse? Yes, with children. n=clients with adult children
Adviser ImpactDriving Engagement; Driving Growth 14
Your Engagement Plan
It’s time to take action.
As you read this report, you may have thought that the research validated what you already felt, but
perhaps did not fully understand: that growth is driven by a relatively small group of your deepest and
most engaged relationships. By understanding that fact, you can begin to focus on the core drivers of
engagement in order to push more clients up the spectrum. The simple beauty of the strategy is that
in doing so, your clients have a fundamentally richer client experience and you reap the benefits of the
associated growth potential.
Now is the time for action. To start, you may want to reflect back on the Roadmap provided on page six
and create your plan of action. The Roadmap identifies the core strategies, tactics and activities, all of
which are explained in more detail throughout the report. In thinking about how to start, consider your
own strengths and weaknesses relative to each of the proposed tactics and then create a more defined
timetable. The table below may help you move forward toward increased engagement.
Activity Next Steps Responsibility Timeline
Partner
Define feedback objectives
Choose method
Select questions
Gather feedback
Communicate results
Fit
Define your ideal
Set minimum standards
Create assessment process
Define process for prospects who don’t fit
Define process for clients who don’t fit
Connect
Segment clients
Define/structure service offer
Analyze capacity
Communicate plan
Track performance
Lead
Define your role with clients
Refine review process
Communicate process to clients