Wealthy clients underserviced, seeking more advisor contact: Survey

(April 23, 2003) Nearly half of Canada’s millionaires have switched financial advisors in the last five years, often due to lack of contact, suggests a survey of high net worth clients conducted by the Stenner Group in Vancouver.

Most respondents report having a good relationship with their advisor. However, in the past five years, 43% of respondents have switched advisors. Reasons for switching include investment performance, lack of contact and poor advice.

“All clients desire more contact and the level of contact has a direct impact on client satisfaction,” Stenner Group head Thane Stenner tells Advisor.ca.

Stenner says in many cases, advisors simply have too many clients. “If you’re focusing on the high end, anything more than 100-120 relationships, you’re probably going to have a watered-down service plan.

“Think bigger, but fewer clients,” he adds.

Advisors can boost client satisfaction levels by focusing only on the high net worth and giving up smaller clients to other advisors, Stenner adds. But he admits that’s not an easy step.

“We’re ingrained to focus on getting more clients,” he says. “But what I’ve learned is that by solely focusing on this area, you get a reputation for service, which leads to more business.”

Nearly 40% of survey respondents said they meet with their advisor once a year. But more than one-third said they’d like to meet with their advisor quarterly. And half indicated they’d like some type of monthly contact with their advisors, such as telephone calls or e-mails.

Stenner’s firm uses a customized contact schedule for clients, based on personality. “We try to contact them in a way that’s in line with how they want to be contacted, versus a blanket approach,” he explains. “It seems customized to the client, but it’s really built around three personality profiles of clients we want to deal with.”

The survey also found that most wealthy clients use either one advisor (39%) or two advisors (32%), while 18% are do-it-yourselfers.

“Few respondents use more than two advisors to manage their wealth,” the survey concludes.

Just under half of respondents use an advisor at a full-service brokerage (48%) while accountants (42%) are also commonly used.

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“It appears as though advisors who are working collaboratively with other professionals to bring the client a coordinated wealth care plan are building the most bulletproof relationships,” Stenner notes.

When selecting a new advisor, ability was cited as the most important quality. Service quality and reputation of the advisor or firm were also mentioned.

More than 40% of those surveyed had a total net worth of between $1 and $3 million. Nearly 60% had a household annual income of between $100,000 and $250,000. The most common occupation was business owner.

The Stenner Group in Vancouver surveyed 143 high net worth clients at two conferences in September 2002 and January 2003. Stenner says similar conferences will be held every quarter and the results will be updated.

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Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

(04/23/03)