Taking The Pulse Of Your Clientele

Open-ended questions have also proven useful to Nigito–so much so that he employs them exclusively. Nigito says his surveys elicit written responses to just 3 or 4 such questions. Among other things, he seeks to learn through these polls what clients like and dislike most about his practice and how it can be enhanced.

Client feedback during the recent recession, he says, pointed up the need to adjust the company's insurance portfolio. Because of a generally heightened aversion to risk, the firm adopted a more conservative investment allocation within its variable universal life policies. The survey responses also prompted the firm to offer equity-indexed life products, which allow clients to participate in stock market gains while insulating themselves against market downturns.

The surveys additionally spurred the firm to reorient the content of its newsletters and other presentation materials. Says Nigito: "We learned from the surveys that clients are less interested in finding out about new products than they are specific techniques, such as how to build a portfolio to facilitate asset transfers or to construct an IRA."

Nigito's experience illustrates another benefit of surveys: In addition to flagging practices that should be enhanced, they can alert the advisor to initiatives that should be deemphasized. And that can translate into smarter business investments.

"A key question to ask in a survey is whether clients would prefer that you refocus your efforts," says Semans. "One advisory firm determined from a survey that it needed to spend less time communicating with clients via social media and more through e-mail contact because the customer base is older. Knowing that, they were able to [boost customer satisfaction] by reallocating project resources."

Often, adds Ward, a survey will reveal the need to better educate clients (as to why, for example, the advisor is charging a certain fee for services); or to recalibrate expectations (some clients, she notes, have unrealistically high expectations for their portfolio performance).

Sometimes, too, a survey will require follow-up by the advisor to ferret out the reasons underpinning the responses. Depending on the sensitivity of the issue, as in cases involving personality conflicts, this might best be handled by a third-party. But observers say that advisors may also do well to contact respondents directly, albeit in a tactful manner.

The advisor, Bruckenstein suggests, could ask the client how–without referencing the client's own responses–a problem identified in the survey should be addressed; or whether the client would be receptive to a proposed solution (e.g., holding weekly teleconferences for clients at busy times, as when the market plummets and the advisor is difficult to reach because clients are seeking reassurance about their investments all at once.)

In-person polling may also make sense during annual plan reviews. Ward says she does an informal survey at every client meeting, where she asks general questions about the value of her services and the client's expectations for the relationship with her for the near- and long-term.

Often overlooked by advisors, says Bruckenstein, are exit surveys of clients leaving the practice. These surveys can be especially valuable in identifying failings in the advisor's screening process of prospective clients.

"The practice may be more focused on financial planning and achieving long-term goals, whereas the client expects short-term investment performance," says Bruckenstein. "That says the client wasn't a good fit from the start–and that the screening process was inadequate."

Ultimately, observers say, a client satisfaction survey is of little consequence if the advisor doesn't act on results that point to deficiencies in the practice. Yes, a survey has value inasmuch as it expresses the advisor's interest in clients' opinions. But if the advisor fails to follow through on areas that clients perceive as lacking, the exercise might prove counterproductive.

Conversely, experts say, advisors should leverage results indicating that they are doing a superior job. Clients who offer high score to the question, "How likely are you to recommend me to others?" could be contacted subsequent to a survey to ascertain whether they'd be indeed willing to provide referrals.

"We're building a database of promoters–people who will refer prospects to us," says Roey Diefendorf, a certified financial planner and principal of 3 Dimensional Wealth, Locust Valley, N.Y. "Clients who indicate in a survey that our service is excellent and that they're likely to refer are assigned a high net promoter score. We'll then follow up with these clients at a later time."