March 12, 2012

Close the Perception-Reality Gap with Effective Client Surveys

Are your clients happy with the value that your advisory firm provides them? Do you offer all of the services that they need (or expect) from a financial advisor? Do you fully understand their expectations and how they value each element of your service model?

Two industry surveys suggest that there is a meaningful gap between client satisfaction and advisor perception of client satisfaction. Last summer, the Institute for Private Investors (IPI) released a study revealing that 63% of ultra high net worth clients are "fully satisfied" with their advisors, compared to advisor perception of 95%. Another study conducted by Knowledge@Wharton and State Street Global Advisors (in 2006) indicates a similar gap between perception and reality.

Routine and thoughtful client surveys can help firms identify and reduce gaps between their perception of client satisfaction and actual client opinion. Here are a few best practices to help RIAs develop and implement client surveys.

  1. Identify your primary objective for each survey. Depending on your circumstances, you may wish to focus your survey specifically on identifying the level of satisfaction among your clients. You could also include questions that will help you better segment your clients based on their needs, expectations, and preferred communication methods. Once you feel confident that overall satisfaction is solid, surveys are a great way to identify opportunities for new service offerings or capabilities that would help deepen client relationships.
  2. Construct simple, clear, "bias-free" questions. Collecting and analyzing client data takes time-both yours as well as your client's. To ensure that you are capturing useful information, effective survey construction is critical. For instance, always begin your survey with relatively simple, "non-threatening" questions. Organize your questions in a way that makes it obvious to clients what it is that you are trying to capture. Be sure that questions are structured in a way that is not biased or "leading" in any way.
  3. Analyze findings and implement change. Plan a session with your team to analyze survey results and identify ways to turn the data you collect into information that you can use to improve your service offerings. If you implement changes, find opportunities communicate to clients that the changes were based on their feedback. This is such a powerful message!
In relationship-based businesses, soliciting and receiving constructive criticism is always a challenge. (This is probably one the reasons for the perception-reality gaps noted above.) To make this effort as productive as possible, consider using a third-party consulting firm to:
  • Construct effective surveys;
  • Collect and aggregate data; and
  • Facilitate analysis of data.
By using a third-party, you are minimizing the likelihood of bias entering into survey construction and data analysis. You are also much more likely to elicit frank, helpful suggestions from your clients.

The RIA industry is dominated by professionals that demonstrate both the willingness and skills to exceed client expectations. With that said, I am not terribly surprised when I read surveys like those mentioned here. It is particularly difficult to ask for (and receive) constructive suggestions from clients with whom you have a deep, often personal relationship. Likewise, decision-making within RIA firms usually rests with one (or a few) entrepreneurial founders that often allow personal biases to cloud their "view of the world".  (We all do it--we're human.)

Conducting client surveys through a third-party facilitator can help you move past these human factors and begin to close the gap between perception and reality among your clients.


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