IPI study: advisors think their service is better than their clients do

The Institute for Private Investors released a study that, I believe, discloses some shocking statistics. If you are concerned about attracting and retaining clients, the study is something you must reflect on. Although AdvisorOne somehow translated the results into the headline “Wealthy Investors Say They’re Happier With Their Advisors” reading the study, Both Sides Now, set off alarm bells for me.

The lead statistics is that 63% of ultra high net worth investors are fully satisfied with their advisor relationship. I don’t know what your high school experience was like, but anything below 65 was a failure when I was there.

Shockingly, 95% of advisers said their clients are fully satisfied. So, 32% of advisors think there clients are happier than they really are. Is it any wonder we are disappointed with the number of referrals we get?

courtesy iStockphoto

Reinforcing that overall statistic, the study found, among other things, that 63% of investors agreed “my advisor produces results in concert with my

family’s goals and risk parameters,” with 17% disapproving of their advisors’ performance. An SEI study I recently wrote about on Advisors4Advisors highlighted the importance clients place on their advisors’ understanding their situation and needs.  This specific kind of failure will lead pretty directly to losing the relationship. Further, a significant portion of those investors do not believe their advisors are utilizing their full resources to the clients’ benefit or providing adequate access. If you are the advisor to one of those clients, your relationship is at risk.

Fortunately, the study also identifies the direction to a solution. “We are seeing a clear trend toward engaging in more of a partnership with the advisor, a natural evolution as investors learn more about due diligence in the aftermath of the financial crisis,” reports Charlotte Beyer, IPI founder and CEO. “Advisors have longer lasting relationships with investors who wish to be a partner in a dialogue.” This reinforces Julie Littlechild’s finding it Anatomy of the Referral: when clients believe there feedback is sought and implemented, they are more engaged, satisfied, and loyal.

The message is clear – involve your clients in a dialogue and discover how they really feel about your service. If you can uncover client disappointment on how well you leverage your resources for them, on access to you, or on the results to deliver, you have the information you need to give them the experience they desire.

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