Closing the gap in wealth management

Jim Keene

Jim Keene, from Atherton Consulting, shared his recent study called “Closing the Gap: Aligning Client and Advisor Needs to Grow the Wealth Management Firm.” He shared it with me after a conversation about common problems in the asset management industry.

“Closing the Gap” studies the disconnect between advisor and client perspectives during the sales process and uncovers several key misalignments between advisor offerings and client expectations. 250 clients and advisors were surveyed from across a spectrum of asset and account sizes who were asked to rank certain attributes of the sales process. Among the most important findings was the difference in how clients and advisors reported discovering each other. Both groups agree that referrals from friends are the most valuable way to match with a new client for advisor but advisors put far greater emphasis on family referrals.

Clients and advisors also disagree on how fee structures should be arranged. Both groups said that fees should be transparent and discussed early in the sales process, but many clients expected their advisors to be investing their own money in the same way they invested clients’.  Discomfort with fees was unanimously listed by clients as a reason not to select an advisor.

One of the biggest points of note for me was the fact that advisors place a greater importance on offering a range of services than clients do. Instead, clients ranked affiliation with other professionals as important to them when selecting an advisor. This has a big impact on firms that market themselves as a one-stop shop, and suggests that there needs to be more focus on explaining how this benefits clients.

“Closing the Gap” lists five key priorities for firms to focus on during the sales process.

• Listen to clients. Create an emotional connection that focuses on the client, not the advisor and make the sales process about them.
• Substance is more important than form. Relationships are built around successful results, so make your knowledge of the industry and mastery of management the star of the show at first.
• Talk about the fee structure openly and early. Be transparent and specific about how you’re paid and how your payment reflects value received by the client.
• Don’t waste resources on direct marketing. Providing exceptional services to clients and being active in your community will grow your business more effectively.
• Ask clients what products and services they want and find a way to offer them. If you can’t provide a service, someone else will.

For the full report, and many more recommendations from Jim and his team, click here.