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Three Steps to Improve Client Satisfaction in 2022


Long term financial planning can be overwhelming.

Despite recent market gains, a study by J.P. Morgan found that 62% of defined contribution plan participants wish they could hand their retirement planning over to an expert. For individuals, predicting a path for investments into the far-off future amid headlines about new COVID-19 variants can feel like trying to build a house on a foundation of sand.

Of course, those who have already selected a financial advisor have assistance navigating difficult retirement questions and projections. In our conversations with financial advisors about helping clients plan for retirement, we have found that the most successful take three key steps during end-of-year conversations:

1. Consider the Tax Advantages of Asset Location

Effective tax management is an all-weather value add. Regardless of market conditions or legislative changes, advisors can boost outcomes by shrinking client tax bills through asset location.

Reducing tax drag through coordinated asset location can drive an annual 1.2% boost to performance, according to Russell Investments. That can equate to an additional $105,000 in returns after 10 years on a $500,000 investment.

“Coordinated” is the operative word here. Every client can benefit from asset location, but the impact will be limited if an advisor is unable to manage all accounts within a client’s portfolio. For clients still in the accumulation phase, this frequently means employer-sponsored retirement accounts, which often comprise the majority of younger savers’ net worth.

2. Offer a Differentiated Client Experience

The wealth industry lags even other financial services sectors when it comes to the virtual client experience. According to J.D. Power, consumers believe wealth apps are less satisfying to use than apps from banking, credit card and insurance providers. It’s easy to forget that investors have become accustomed to one-click convenience in every other aspect of their lives.

Start the year by asking yourself: how can you improve the experience for clients?

Our successful advisors do so by revisiting client expectations:

  • First, many clients expect all of their assets to be managed toward the goals that you set together.
  • Second, in an increasingly connected world, clients are used to accessing relevant data quickly and comprehensively, be it from financial accounts or fitness trackers.
  • Finally, clients expect their advisor to implement tactical and strategic changes across their entire portfolio, including held-away accounts.

This last point presents a challenge for many advisors. We have found that, while many advisors have the ability to report on held-away accounts, clients are frequently left unsatisfied by that level of service. They expect these accounts to receive the same care – continuous monitoring and regular rebalancing – as their brokerage accounts and IRAs. Without it, asset allocations can shift and performance could suffer, as we saw in early 2020 during the COVID-19 crisis.

3. Help Clients with Impulse Control Around 401(k) Decisions

When clients are responsible for implementing trades in their accounts, they can quickly fall into the trap of making impulsive decisions based on short-term market movements. To fight these impulses, advisors should consider taking ownership of monitoring, advising on and implementing changes on behalf of their clients. Doing so effectively eliminates the situation wherein a temporary market shift triggers a client’s impulse to reallocate their portfolio in a way that no longer matches their goals.

There are quantifiable benefits to adding value through planning and behavior management. Industry researcher Dalbar found that the average individual investor underperformed the broader U.S. equity market by 2.11% in the first half of 2021, due largely to pulling back in response to volatility.

Investors are heading into 2022 with no shortage of headwinds that could threaten their long-term retirement goals. With new COVID-19 variants, supply chain shortages, inflation and other market moving events on the horizon, there’s never been a better time for you to talk to clients about taking over responsibility for trading and rebalancing their held away accounts to strengthen their relationships and improve long-term outcomes.

Dave Goldman is the vice president of development at FeeX

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