Actionable Strategies To Deliver An Optimal Wealth Management Client Experience At Every Touchpoint

Transcription

1 A SourceMedia Thought-Leadership Roundtable Participants A SourceMedia Thought-Leadership Roundtable T.J. Dieveney, Managing Director, Wells Fargo Actionable Strategies To Deliver An Optimal Wealth Management Client Experience At Every Touchpoint Diane Liewehr, Senior Vice President, Head of Consumer Insights and Research, HSBC Bank, USA Cheryl Nash, President of Investment Services, FiServ Sponsored By Moderator Sophie Schmitt Senior Research Analyst, Aite Group The following is an edited excerpt of a July 23, 2013 roundtable discussion titled Actionable Strategies to Deliver an Optimal Wealth Management Client Experience at Every Touchpoint. Sophie Schmitt, a senior research analyst with Aite Group, moderated the discussion that included the views of representatives from several leading wealth management firms. Sophie Schmitt (Moderator): We re here today to discuss the ingredients of a superior wealth management customer experience. We ll also touch on the role technology plays in enhancing advisor-client interactions as well as challenges and obstacles related to delivering the optimal customer experience. Finally, we re going to touch on client segmentation and how it plays into the customer experience. Throughout the discussion, I will be sharing with you results from Aite research. The findings from this research will help drive our conversation. Morgan Ryan-Angel, Executive Director, GWM Operations Strategic Initiatives, Morgan Stanley Wealth Management Paul Sturr, Executive Director, Morgan Stanley Maura Rose, Senior Vice President, Chase Private Client Banking Products, J.P. Morgan Chase David Sheehan, EVP Marketing, Personal Wealth Management, Citi Tony Young Industry Principal, Financial Markets, Pegasystems Dale Yurko, Consumer Insights and Research, HSBC Bank, USA An Advertorial Produced by SourceMedia Marketing Solutions Group

2 Customers want us to anticipate their needs and suggest personalized products. Even when they are working with a big bank, they want a small bank experience. Paul Sturr, Morgan Stanley The first question I d like to pose is: What do you think makes for a stellar customer experience? David Sheehan: There are a lot of factors that go into it. One is making sure that you work with your clients in a way that they are most comfortable, regardless of the channel. You also have to make sure the channels are integrated from a technology standpoint, so moving between them is seamless for the customer. Another thing is to personalize the experience to provide products and solutions that are the most meaningful to your customers, based on their individual needs. It s also critical to make customers feel important. Paul Sturr: Customers want us to anticipate their needs and suggest personalized products. Even when they are working with a big bank, they want a small bank experience. Sheehan: I also find that customers feel frustrated when certain products or services aren t available to them, for whatever reason. They really appreciate having access to a breadth of product offerings. Schmitt: Let s talk about areas you see firms falling short with respect to the customer experience. Maura Rose: I think there are multiple lines of business where a client might engage in your banking solutions and your investment solutions, and perhaps credit cards. And you have to be able to understand the entire relationship. There are different processes each of those lines of business follows so the customer is going through one lengthy process in one area, and then something completely different in another. Sheehan: Lack of communication between different departments is a problem in the industry. For example, if a customer is approved for a million-dollar mortgage, but is rejected for a credit card due to a technicality, that s a poor experience. Dale Yurko: Simple mistakes can permanently harm the customer relationship. There are multiple lines of business where a client might engage and you have to be able to understand the entire relationship. Maura Rose, J.P. Morgan Chase 2

3 Clients are using multiple firms and they compare them expectations may not be determined by what you re delivering, but what somebody else is delivering. Dale Yurko, HSBC Bank Schmitt: Research shows that one way to demonstrate to clients that we understand their needs is by reaching out to them on their terms. How do you make sure you connect with customers in the most appropriate way? Yurko: There is no one-size-fits-all-model. I mean, you talk to some of the older Boomers and they don t understand why people would want to look at their balances online. They re not going to look around; they re going to call an advisor. On the other hand, you ve got younger customers who are completely different. Sturr: It s not necessarily age. Everyone is so different. It s a real challenge. Sheehan: I agree it s not necessarily age-based. I have a friend whose 92 yearold mother day-trades on her ipad in the nursing home. Sheehan: Sometimes it s a matter of teaching people how to make technology work for them. If you want to change behaviors, you need to ramp up your client communication and education efforts. I started in the business when ATMs were first being rolled out, and I remember giving a number of demonstrations on how to use them. Direct deposit was introduced nearly three decades ago, and we re still trying to get people to use direct deposit. Whether it s online bill payment or mobile check deposit, you really do need to keep hitting home about new products and services and their respective advantages. You can do things to change customer behavior; it just takes a lot of effort. Schmitt: Aite studies show that client assets are migrating from wirehouse and full-service brokerages to independent RIAs and discount and online brokerages. Is this because the client experience is lacking at wirehouses and full-service firms? Yurko: We are seeing some assets shifting to these other channels, but it s not necessarily a result of poor customer service. The fact is that some affluent people like to keep a certain percentage of their assets in an online account, where they feel they have more control over it. We ve been seeing this trend since the Great Recession when a lot of investors got burned. They aren t necessarily placing all their money in online accounts, either. They are putting in just enough to allow them to keep a closer eye on some of their money. With respect to investors who are exclusively self-directed, it s been an internal debate for years whether some of them will eventually seek help. It s possible that they will stick with the self-directed model, but it s also possible they will eventually recognize they can t do it alone. Only time will tell. Sturr: I agree. It s still unclear whether Baby Boomers who have left traditional firms for other channels will ultimately return, finding they need more than an online brokerage can provide. Meanwhile, members of the Millennial generation who will eventually inherit their parents assets are technologically savvy. So, we need to find a way to better connect with these younger investors as well. 3

4 There are a lot of things you can do from a technology perspective to improve customer interactions. But it s expensive. It s an area where many firms are struggling with the question of whether to fix the plumbing or update it completely. David Sheehan, Citi Schmitt: Switching gears a bit, I d like to talk a bit about technology and the role it plays in the client experience. Mobile and online capabilities are no longer differentiators for banks; they are a requirement just to meet investors basic needs. In what other ways is technology being used to strengthen the client experience? Ryan-Angel: At Morgan Stanley, we ve heavily invested in technology that helps our advisors do their jobs more efficiently. We have invested in technology for The challenge is to find the right technology and teach employees to use it most efficiently. Diane Liewehr, HSBC Bank clients as well, but not for the purpose of leading them down the self-service road. For the most part, we want our clients to work with their advisors. Schmitt: Aite research shows that funding for IT initiatives designed to improve the client and advisor experience is limited due to firms regulatory and cost-savings initiatives. Is this something you are seeing? Ryan-Angel: I think the regulatory measures are always going to come first from a budget perspective. We don t have a choice because of the industry we re in. But at least for us, right now, technology designed to improve the client experience is getting a lot of attention as well. Sheehan: There are a lot of things you can do from a technology perspective to improve customer interactions. But it s expensive. It s an area where many firms are struggling with the question of whether to fix the plumbing or update it completely. Schmitt: Besides funding, what are some of your biggest challenges when it comes to providing outstanding customer service? Yurko: Dealing with expectations customers have from their interactions with other firms. Today, a lot of clients are using multiple firms and they compare them to each other. That means that customer expectations may not be determined by what you re delivering, but what somebody else is delivering or promising to deliver. Ryan-Angel: One complication that comes with improved technology is that everyone expects instantaneous service. Customers don t believe there should be any wait time. And that can be challenging. 4

5 Schmitt: Let s talk about segmentation. Our research shows that nearly 70 percent of advisors segment clients. The research also shows that advisors have more proactive interactions with high-priority clients and spend less time on low priority clients. Does the industry have a standard way to segment clients? Sheehan: Remember segmentation can be used for different purposes. If you re talking about segmentation to connect with clients from a marketing perspective, that is a very different approach to the type of segmentation an advisor would do based on assets and profitability. All firms are, to some extent, doing segmentation around life stages. But it s really a matter of figuring out the right approach for the company, and which one you can execute. Segmentation is only as good as your ability to implement an ongoing strategy around it. Dieveney: We don t have systems in place today to do exactly what we d ultimately like to be able to do with respect to segmentation. We ve rolled out some tools to our advisors and are looking at other ways to better segment customers. For example, we would like to build models that allow the advisors to segment customers based on their needs or their potential. We re also looking at ways to segment clients based on how they prefer to work with us, as well as by different client profile models. Schmitt: How do you envision sharing that information with advisors? Dieveney: We would ideally give the information to the advisors and then personalize the client experience based on how that client wants to work with us. We re trying to gain insight on client preferences from our advisors to help us better understand our clients behavior. Schmitt: Capturing this data can ultimately change the way clients are serviced. You can easily shift gears to offer self-service to clients who want it and full-service to others. Having a full service case history provides institutional memory so that any member of the service team that has interactions with a particular customer is allowed to see the holistic view Dieveney: Correct. We re in the process of trying different things. One tool we ve rolled out has been getting very positive feedback from advisors who have used it. It s easy for them to use and basically empowers them to interact differently with each client. Yurko: And they re free to choose whether or not to use it? Dieveney: They are right now. We re tweaking it and extending it to other parts of the business. Sheehan: Is there oversight to make sure it s being used appropriately? Dieveney: We ve got structured programs where we are rolling it out, and we re asking advisors to use it. We re not mandating it yet. Tony Young, Pegasystems Schmitt: What about the idea of making segmentation data more publically available to a firm s advisor base? So for example, if a client has five attributes, an advisor could see what other advisors are doing for clients who share those characteristics. Ryan-Angel: The one hurdle with this is that advisors are a little guarded about their relationships with their clients and also about their investment strategies. Sharing information about a particular investment recommendation is one thing, but advisors may be hesitant to share information on how they are interacting with clients, for example. 5

6 Our internal research shows that loyalty is not as high with clients with whom we re not as proactive. T.J. Dieveney, Wells Fargo Schmitt: As I mentioned earlier, our research shows that advisors who segment their clients are able to spend more time with their high-priority clients. Is this something you are encouraging your advisors to do? Dieveney: Certain advisors are very good with active communication, others not so much, which can be a problem for those advisors in the latter camp. Customers want proactive advisors. They make decisions on what firm they work with based on how proactive their advisor is. Our internal research shows that loyalty is not as high with clients with whom we re not as proactive. Schmitt: Does technology play a role in trying to get advisors to work proactively? Cheryl Nash: It does. For example, if an advisor is alerted that a customer s CD is going to mature, he or she is more likely to reach out to the client. Sheehan: We have technology, for example, that prompts advisors to interact with clients around certain events such as a birthday or anniversary with the firm. Hopefully these prompts serve as a catalyst to encourage advisors to reach out to clients. I have to say that we see a direct correlation between the frequency of outreach and customer satisfaction. Liewehr: So much has changed over the last 10 to 15 years. Financial services firms definitely want to use technology for proactive communications with clients. I think the challenge is to find the right technology and teach employees to use it most efficiently. Everybody wants to be proactive because it helps build relationships. If an advisor reaches out to a client telling him he s going to overdraw and tries to help solve the problem, the client is going to remember that advice and who gave it to him. Tony Young: What types of things would you like to segment that you aren t already doing, assuming the technology is or would soon become available? Sheenan: Customized educational content and information based on the individual client. Ryan-Angel: Maybe additional concierge services for better servicing. Nash: I think of it like an airplane. The airplane has first class, business class, and economy class. Financial firms can think about segmenting clients in a similar fashion. Schmitt: In what other areas would segmentation come in handy? Dieveney: An enterprise-wide ability to view a client s profile and know who at the firm he or she is interacting with. Advisors could look up in the system all past conversations with a particular client and read a short summary of the discussions that took place. This makes for a better experience for clients and advisors. Young: Having a full service case history provides institutional memory so that any member of the service team that has interactions with a particular customer is allowed to see the holistic view, albeit within the realm of privacy guidelines. Liewehr: That comes back to the concept of a team, versus flying solo, right? Yurko: Right. Every channel looks at a different group of customers. The ability to have a more complete picture would be terrific. Dieveney: We re trying to do something along these lines at Wells. Where we put a customer at the center and build systems around the customer. It takes a lot of time and energy, but the idea is to put your individual business needs second and the client first. Things are heading in that direction, but it s a very, very long road. 6