We recently received an email from an advisor asking how we assess the performance of client service staff in independent advisory firms. It's an excellent question and one that many owner-advisors are asking these days. While we've been building client service departments in our client firms since 2007, many firms have only recently added dedicated client service staff and are still trying to sort out how to train and monitor them effectively.
As you know, lead and senior advisors could work with significantly more clients and meet with more client prospects if they didn't have to talk with their clients every time they had an issue that could be handled at a clerical level. Many advisory firms solve this problem by having junior advisors deal with these issues or clerical people handle them. Unfortunately, that gave junior advisors less time to take more complex advisory issues off the owner's desk or meant that clients were being helped—or not—by untrained employees. As you might guess, neither is an optimal solution.
We found that a far better solution is to hire, train and support dedicated client service staffers whose full time jobs are handling all client issues that don't require the expertise of an advisor. They bring the issues they can't handle to the attention of an advisor and monitor the resolution of that issue. We find that client service departments not only leverage advisors so they can generate more revenues than their cost, but also dramatically increase both the quality of a firm's client experience and its volume of referrals.
As the above advisor question points out, adding client service departments does create some challenges for advisory firms. However, how to assess client service performance should be the last of those challenges that firms address. If the other challenges are handled successfully, it can be resolved relatively easily.
The first issue in creating a successful client service department is for owner-advisors to accept client service as an essential element for the firm's success. If they aren't viewed as critical, client services won't deliver the desired results. As I've written before (see "The Death of the Rainmaker," Investment Advisor, July 2014), many owner-advisors have difficulty embracing the client service solution and successfully integrating those staffers into their firms. From that article: "The first step is changing a firm's (and owner's) focus from bringing in new clients to delivering killer client service. We're not talking about lip service here. The 'client service people' need to be viewed as the 'heart of the house,' the key to the success of the firm. They will have the most interaction with the clients—and much of the clients' impression of the firm will come from those interactions."
Unfortunately, even owner-advisors who recognize the need for a client service department often see client service people as second class. Consequently, they don't hire enough client service people, they don't compensate them well and they overwork them with too many clients and clerical work not related to client services. Then they conclude that client services aren't very helpful. The irony is that a well-staffed and well-supported client service department will more than pay for itself with higher referral rates and lower marketing budgets.
The next challenge is hiring the right client service people. Client service requires a totally different mentality from an advisory team. People who are attracted to client services work—both men and women—enjoy serving people and helping others. They don't have a huge need to "get to the top" of the org chart.
Instead, they get their satisfaction out of how much they can do for another person. They aren't hard to spot, and we've found that the best client service people have been in client service their whole lives and love it. You'll want them to stay in client service forever—maybe moving up to management, but still in client service—because client service people are usually great trainers (it's another way to help people).
