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Trust(ing) your client retention

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John Anderson, Managing Director, SEI

Adding trust services to your offering may help you create a differentiated offering and extend your client relationships.

As Allie Carey and I wrote in our December 2018 paper, Your High-Net-Worth Client Strategy, while 85%¹ of high-net-worth (HNW) clients were satisfied or completely satisfied with their advisor, a percentage of that 85% were still thinking about moving some or all of their assets in the next 12 months. In the paper, we discussed many of the reasons why – a number of them said you don’t have the tools to keep them – and some ways to build more loyalty and create “wow-able” moments.

We also shared studies from CEB, which showed a trend of HNW clients working with only one or two financial providers is decreasing. Even more interesting is that the number of HNW households consulting with 4 or more institutions for financial guidance is increasing.

A key takeaway in the paper is that clients are seeing a sea of sameness when it comes to generalist financial advisors, and it was perceived as less risky to have multiple advisors. From those who *had* changed advisors, we reported on research from Matt Oechsli that said they switched their financial advisors when they:

· Had accumulated enough assets (43%)
· Experienced a financial life event (24%)

With all this in mind, it really struck me when I read our own Dean Mioli’s articles in Financial Advisor, stating that only 23%² of advisors employ trust services.

Putting it together

So if I am interested in client retention (even with my satisfied clients), creating a differentiated offering, making sure my clients don’t think they will outgrow me, and having the tools for financial events, one of my choices might be to add trust services to my offering.

Dean’s article, Establishing ‘Trust’ During Times Of Transition, is a great start to educate yourself on how this can fit into your practice

His follow up, 6 Areas To Consider When Outsourcing Trust Services, walks us through what to look for when partnering with an trust company. Remember, you don’t want to invite competition into your client relationships, so the idea of an independent trust company can make sense for you and your clients.

Take a look at Dean’s article and consider your HNW client needs. Will they be trusting you down the road – or another institution?

¹Source: SEI Consumer research, in partnership with Phoenix Marketing International, May 2018, n=263; Using a 7-point scale, where “7” means “Very Satisfied” and “1” means “Very Dissatisfied.” SEI is not affiliated with Phoenix Marketing International.

²Insights from The 2017 Fidelity RIA Benchmarking Study

This information is for educational purposes only and should not be interpreted as legal opinion, research or advice. Neither SEI nor its affiliates provide estate planning or tax advice. You should seek advice based on your particular circumstances from your legal and tax professionals.

Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company. The content is for educational purposes only and is not meant to provide investment advice or as a guarantee of any specific outcome. While SEI welcomes comments, SEI is not responsible for, and does not endorse, the opinions, advice, or recommendations posted by third parties. The opinions expressed in comments are the view(s) of the commenter(s), and do not represent the views of SEI or its affiliates. SEI reserves the right to remove any content posted by users of this site in its sole discretion.
Adding trust services to your offering may help you create a differentiated offering and extent your client relationships.

As Allie Carey and I wrote in our December 2018 paper, Your High-Net-Worth Client Strategy, while 85%¹ of high-net-worth (HNW) clients were satisfied or completely satisfied with their advisor, a percentage of that 85% were still thinking about moving some or all of their assets in the next 12 months. In the paper, we discussed many of the reasons why – a number of them said you don’t have the tools to keep them – and some ways to build more loyalty and create “wow-able” moments.

We also shared studies from CEB, which showed a trend of HNW clients working with only one or two financial providers is decreasing. Even more interesting is that the number of HNW households consulting with 4 or more institutions for financial guidance is increasing.

A key takeaway in the paper is that clients are seeing a sea of sameness when it comes to generalist financial advisors, and it was perceived as less risky to have multiple advisors. From those who *had* changed advisors, we reported on research from Matt Oechsli that said they switched their financial advisors when they:

· Had accumulated enough assets (43%)

· Experienced a financial life event (24%)

With all this in mind, it really struck me when I read our own Dean Mioli’s articles in Financial Advisor, stating that only 23%² of advisors employ trust services.

Putting it together

So if I am interested in client retention (even with my satisfied clients), creating a differentiated offering, making sure my clients don’t think they will outgrow me, and having the tools for financial events, one of my choices might be to add trust services to my offering.

Dean’s article, Establishing ‘Trust’ During Times Of Transition, is a great start to educate yourself on how this can fit into your practice.

His follow up, 6 Areas To Consider When Outsourcing Trust Services, walks us through what to look for when partnering with an trust company. Remember, you don’t want to invite competition into your client relationships, so the idea of an independent trust company can make sense for you and your clients.

Take a look at Dean’s article and consider your HNW client needs. Will they be trusting you down the road – or another institution?

¹Source: SEI Consumer research, in partnership with Phoenix Marketing International, May 2018, n=263; Using a 7-point scale, where “7” means “Very Satisfied” and “1” means “Very Dissatisfied.” SEI is not affiliated with Phoenix Marketing International.

²Insights from The 2017 Fidelity RIA Benchmarking Study

This information is for educational purposes only and should not be interpreted as legal opinion, research or advice. Neither SEI nor its affiliates provide estate planning or tax advice. You should seek advice based on your particular circumstances from your legal and tax professionals.

Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company. The content is for educational purposes only and is not meant to provide investment advice or as a guarantee of any specific outcome. While SEI welcomes comments, SEI is not responsible for, and does not endorse, the opinions, advice, or recommendations posted by third parties. The opinions expressed in comments are the view(s) of the commenter(s), and do not represent the views of SEI or its affiliates. SEI reserves the right to remove any content posted by users of this site in its sole discretion.

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