Requesting client feedback can help financial advisors improve the level of engagement among their clients, according to Randy Ambrosie, founder and CEO of Accretive Advisor, an online service that connects investors with advisors.
In a strategy that Ambrosie calls ‘Moneyball for advisors,’ he says it’s possible to generate more referrals and boost engagement by asking clients for feedback. He likens it to a strategy used by many Major League Baseball teams to build winning teams by analyzing player statistics. The strategy was publicized in the 2011 movie Moneyball.
“They learned a whole new way of thinking about how to build a successful team, and they used data and information,” Ambrosie said, speaking at the Exchange Traded Forum, hosted by Radius Financial Education in Toronto on Thursday. “There is a way to play Moneyball in your business.”
Indeed, he says that by collecting feedback from your clients, you can uncover a slew of data and information that’s incredibly valuable to your business. He suggests asking clients how satisfied they are with your services, the aspects of the relationship they like and dislike, and what they find most valuable about what you do for their family.
Feedback can immediately reveal which of your clients are engaged, satisfied, complacent or unsatisfied, and why. “[Clients] will give you tremendous insight into their level of satisfaction,” Ambrosie says.
According to research by Advisor Impact, a subsidiary of Accretive, 18% of clients, on average, are dissatisfied with their advisor; and another 12% to 15% are complacent. Such clients are at risk of switching to another advisor, Ambrosie says.
At the other end of the spectrum, about 18% of clients are engaged, and are most likely to provide successful referrals. By determining which clients are engaged, and why, advisors can figure out how to get more clients engaged, Ambrosie says.
“If you can begin moving those clients from the ‘satisfied’ bucket into the ‘engaged’ bucket, they become advocates for your business,” he says.
Feedback can also uncover new revenue opportunities, if, for instance, clients indicate that they’d be interested in exploring products or services that you currently aren’t offering.
As the population ages, finding new sources of revenue has become particularly important for advisors. As a client approaches the age of 60, Ambrosie says the revenue that an advisor earns on that client’s assets begins to decline. In fact, some firms estimate that their revenue per dollar of assets under management could decline by 15% to 20% in the next five years as a result of this demographic shift.
“The decline in revenue per dollar of AUM is a great concern,” he says.
Ambrosie encourages advisors to think of themselves as the CEO of their business, and to think strategically about new revenue and growth opportunities to explore as more of their clients move into the de-accumulation phase of their lives.