There is a strong bond between the quality of your client relationships and your ability to grow your business. In this article, we map out the linkages between laying a strong service foundation and then leveraging that foundation to grow, either organically or through external sources. Most advisors recognize that strong client service is an opportunity in and of itself; our focus here is how to take the first steps toward defining or refining your foundation while simultaneously identifying opportunities to grow your existing client relationships.

The way in which you define your target clients and the goals you have set for your business will strongly influence the tactics that will have the greatest impact on your business. Next, we'll make the case that business development success is a balance between starting with a solid foundation, selecting the right tactics and executing those tactics consistently and well. Financial advisors, it seems, agree.

In a recent study of investors, Economics of Loyalty, Advisor Impact proved something we have always espoused, which is that there is a clear and enduring link between the quality of advisors' client relationships and their ability to grow profitably. Any growth strategy, therefore, begins with existing clients and the strength of those relationships. Building on that foundation, advisors can choose to focus organically (cross-selling, share of wallet and referrals) or externally (prospecting, centers of influence or acquisition) (see "Strategies for Growth" on page 79).



One of the simplest places to start in laying a strong foundation is with a client feedback strategy. Too often feedback is seen as "nice to have" in advisory firms when, in fact, it can have a fundamental impact on overall profitability, and drive growth. Executed well, it not only tells advisors if clients are satisfied, but it also uncovers detailed information on what they need, want and expect, and that links directly to revenue and referral opportunities.

A relatively simple client survey should help you to meet at least four core objectives:

* Building deeper relationships;

* Structuring and streamlining client service;

* Cross-selling more effectively; and

* Increasing referrals from both existing clients and outside centers of influence.

That said, a minority of firms have conducted a client survey in the past three years (see "Yes or No?" at left). Notably, top-quartile advisors (the top 25% of advisors based on total owner income) are more likely to have asked for client feedback, suggesting a stronger focus on understanding the needs of clients. Similar patterns hold for client feedback when we look at business model, although investment advisory and insurance firms are less likely to ask for feedback (see "Yes or No, by Business Model," at left).

While a majority of advisors agree that creating and maintaining a satisfied client base is critical, we can see that few formalize the process with feedback. The reality is that, like most initiatives, this process takes a commitment not only to ask the questions, but also to respond to the answers.

In addition, client feedback is a very personal process and many advisors are gripped by the fear of hearing potentially negative feedback. Our position with advisors has always been that fear of negative feedback is more harmful than soliciting feedback that is negative, since once the latter is realized it can be remedied.

While fear may influence action (or lack thereof) with client feedback, actual satisfaction ratings suggest the fear is without basis. For advisors who had conducted a survey, satisfaction ratings were 4.5 out of 5 for top-quartile advisors and 4.55 for all other advisors. These high scores are apparent across the industry, with Advisor Impact reporting average satisfaction ratings of 4.6 across the tens of thousands of clients they have surveyed on behalf of financial advisors. Advisors want more; they are targeting overall satisfaction ratings of 5.0, however, and the perfect score is elusive (see "Nearly Perfect," at right).

With this in mind, one might extrapolate that those advisors who solicit client feedback are more confident in their service offering and client satisfaction, and thus more likely to get high ratings. By contrast, the next logical question would be whether advisors who do not conduct surveys are less confident, and thus choose not to do surveys. Or if they were to do so, would they receive lower ratings?

In this case, we can never know. But given that delivering financial advice is a highly personalized service offering, we steadfastly believe that conducting client surveys is a best practice to be embraced by any advisor who wishes to deliver high-quality services and run a high-quality business.

Some advisory firms make client feedback a part of their culture while others treat it as a one-off event. About 15% of advisors conducted client surveys as a one-off event; however, we can clearly see that top-quartile advisors consider this an ongoing part of their business, with 33% of those who conduct surveys doing so annually (see "Ongoing or One-Off Event?," at right).

The frequency of surveying clients is a clear differentiator between top-quartile advisors and all other advisors. The important point is that the majority of firms conducting client surveys are doing so with some repeatable frequency, learning from them and instituting change when necessary.



There is a strong argument that the very process of asking for feedback can help to build strong client relationships. While we agree, we believe-and the data supports us-that actually using that feedback is what is most important, whether it is to follow up on a question or a revenue opportunity.

The importance of providing input is the very reason why client advisory boards work; people want to feel that they matter, and allowing clients to have a say about their experience at the firm level achieves that sense of significance. When using feedback, clients need to see the results of their feedback, or constructively hear why their suggestion could or could not be instituted, in order to realize the full potential of their participation. Conducting a client survey and not responding is the equivalent of getting a client referral and not saying "thank you"-it is just poor taste and judgment.

According to Advisor Impact's new Economics of Loyalty study:

* 61% of the most engaged clients say that being asked for their feedback is somewhat or very important, jumping to 68% among those clients with $1 million or more in investable assets.

* 72% of the most engaged clients say that the feedback they provide actually makes a difference.

In considering this, we can't help but notice that there is a wide gap between these ratings and the percentage of advisors who incorporate feedback into their businesses today. The reality is that while the benefits of client feedback can be compelling, there is both an art and a science to getting it right. As a result, many advisors are choosing to outsource the process, recognizing that the money saved by doing it internally may represent a false economy if the questions aren't right and the analysis doesn't clearly link to practical and actionable outcomes.


Stephanie Bogan is the CEO of Quantuvis Consulting ( Quantuvis has partnered with Advisor Impact, a leading provider of client feedback solutions for financial advisors and their firms. You can learn more about their Client Audit program at or emailing


In Practice

What client questions drive growth? Your client feedback program should, of course, reflect your unique business objectives, but here are two approaches to using client feedback to increase revenue.

* Increase awareness of existing services or improve cross-selling. A good client feedback program can uncover opportunities to build deeper relationships with centers of influence, increase share of wallet, improve cross- selling and increase referrals from existing clients. You can uncover cross-selling opportunities by simply asking clients which services they are interested in learning more about; those can range from charitable giving to estate planning.

* Increase client referrals. No matter what the range of services you provide, referrals are always a key driver of growth. And while most advisors say that the majority of their new clients come from referrals, they also say that they are not taking full advantage of the potential opportunity because only a small percentage of clients are providing referrals.

The question a survey asks is simple: "Are you comfortable providing referrals?" The result, however, is a list of target clients around which to focus your referral efforts.

The examples above are really just the basics-core to any good client feedback program. However, there are many other objectives you can meet with carefully crafted questions and a good process to analyze and use the information.

You might want to gather feedback on services provided by your support staff, for example, and link that to their bonus. You may be interested in testing reaction to a new workshop series you plan on running. Or, you could be evaluating how you market your business and look for feedback on positioning statements.


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