The new ‘syndicated’ approach takes feedback from wealth firms’ actual clients, rather than the more traditional panel approach, to gain a truer insight.

With growing interest from wealth management to create a meaningful performance benchmark which the industry can build on, the Scorpio Partnership team (now part of New York-listed services group Aon) gathered data from more than 9,000 clients of private banks and wealth managers in the UK, who collectively manage assets upwards of £200 billion.

Prior to this work, the team had only been able to produce aggregate scores using external data to help firms benchmark performance, which “wasn’t as disciplined an approach as we would have liked”, Caroline Burkart, associate partner in the client insight team at Aon said. In 2018 the group launched a benchmark using data gathered through panels of high net worth individuals in the UK, which culminated in 900 clients across 25 UK firms taking part. For private wealth in the UK, “this was pretty significant," she said.

From these early efforts has come the first full benchmark which includes 21 questions, initial results of which were released in December and published below. In a follow-up conversation about the approach, Burkart told WealthBriefing that the process starts with profiling questions. “All firms want results split out by segment, whether this is for age or investable wealth levels or tenure at the firm, so profile questions are important.”

The next stage was answering questions based around nine key performance indicators, with the results of six of those shown below. It was important for the group to use several KPIs to benchmark, not just one or two, she said, to cover all aspects of the proposition.

“It is all very well knowing what your net promoter score or satisfactions score is but you need to know what is influencing those scores,” Burkart said. “You can’t go to a banker and say, ‘Oh your client satisfaction is X and you’ve got to get it to Y. You have to provide insight for how they are going to get to Y.”

Aon’s goal has always been for these private client experience surveys to come together and be done as a syndicate “so that we get live client data from the firms rather than going out through a panel because we see a truer picture,” she said.

The need for objective, measurable evidence of what clients want and their satisfaction/dissatisfaction with a service is clear in an industry wrestling with challenges such as new technologies, inter-generational wealth transfer, tight margins and low or even negative real interest rates. At this publication we have charted important industry trends such as why client reporting is such an important way for firms to stand apart from their peers, to take one example. Another was recently teaming up with Finantix on new research into how much the wealth management sector is reliant on technology for finding new clients.

Aon's benchmark respondents (over 9,000 UK private clients in total) also responded to five client journey questions seen as fairly generic across the sector. These included satisfaction with onboarding, satisfaction with the portfolio review, and so on, to provide firms with a better understanding of how they are performing in each of those areas. Behind these high-level queries sit a whole set of diagnostic questions, which is where real change can happen.

“The headline shows how satisfied a client is with the onboarding process but behind that are a questions focused on the time it took, what aspects of onboarding did the firm deliver on, and what aspects did it not and therefore needs to improve on.” Burkart said that while some participants completed the full-length survey, in the sense that they had all the diagnostic questions and a set of bespoke questions, others just answered a core set of 21 questions. But “all firms have gained valuable insight".

Value
With wealth management, like any other sector, hungry to see where services are getting the most traction and where they can add client value and gain an edge, this research will become more valuable as it becomes more comparable and more firms take part.

Aon believes that being able to benchmark the client experience across a large sample of high-calibre clients is breaking new ground. “Many firms have been asking client engagement questions for years, but we’ve only seen it really take off in wealth in the last five to seven years. So, to get all these firms together to be benchmarked against each other is a first for the industry in the UK,” Burkart said.

It allows wealth managers to collect client experience data that “isn’t just qualitative in nature but actual data that can be cross-correlated with other aspects of their performance.” For example, the firm has helped link client experience feedback with productivity metrics, quantifying which of the client experience factors have the biggest impact on asset or revenue growth.

“When you take all the data points from these other service areas and cross reference them with the client experience it provides a very powerful tool for understanding how your front office is performing and what it needs to do in order to raise the performance bar,” she said.

“The whole point is the industry is client centric. It is all very well measuring client satisfaction internally but if everyone is getting very similar scores and that’s the norm, in order to stand out, you’ve got to be really outstanding,” Burkart added. To achieve that, you need to know how you stack up against others.

Burkart hopes that firms will recognise the benefit of benchmarking as a way of seeing where they rank, and that by generating metrics rather than just qualitative feedback firms can measure, track and manage their businesses better for growth. What Aon says has been particularly interesting for all the firms taking part is that when they start to dig down behind the headline numbers and understand what the components are, they see where they need to tweak their proposition to improve client satisfaction. “The firms that have asked the more in-depth questions are able to identify the critical client moments, that are influencing satisfaction, and by definition, growth in revenues and assets,” she said.

The scores....

2019 UK Syndicated CX Benchmark: KPIs

Net promoter score – standard metric used across multiple industries to measure client loyalty and propensity to refer the firm – can range from -100 per cent to +100 per cent
* 46 per cent
Aon suggests that 46 per cent is good, with some firms having scored higher than this; but adds that it is important to look behind the overall score to the promoters, neutrals and detractors to see how they influence the overall score.

Relationship manager satisfaction – satisfaction with their relationship manager/private banker/primary point of contact and scored out of 10.
* 8.87
RM is almost always higher than overall satisfaction and often climbs to the low nines at individual firms, the survey showed.

Overall client satisfaction – a client’s overall satisfaction with the firm, products and services they receive. This area scored high at 8.54 but rarely climbs above 9, Aon found.
* 8.54

Client outcomes – the extent to which a firm’s products and services deliver favourable outcomes for a client, being in line with risk tolerance, meeting individual goals and needs, and offering good value for money.
* 94 per cent
While risk tolerance, goals and needs always score high when broken out, markedly lower scores were seen when it came to value for money.

Brand value score – the extent to which clients consider a brand trustworthy, transparent, sensitive to client needs, forward thinking, innovative and exciting.
* 64 per cent
The benchmark found that firms typically score high on the first three criteria and drop off markedly when it comes to being forward thinking and innovative.

Share of wallet – the amount of a client’s investable assets held with their wealth manager.
* 54 per cent
This score tends to trend higher as clients get older and consolidate assets with their preferred advisor but drops off somewhat for wealthier clients who are more likely to have multiple providers. It differs by segment across firms and is a good indicator of a client’s ability to bring in further assets, research found.

So where from here?
“We hope the benchmark itself – the questions that were asked – enable people to expand so that we can bring in more of the diagnostic questions to help firms understand not just what score they have but why they have got that score and how they can then influence it,” Burkart said.

A roundtable is taking place towards the end of January, at which Aon is inviting over 50 firms to give high-level feedback on how the benchmark is going to progress for 2020.

Burkart is optimistic that more participation will help bring the sector more in line with industries which arrived rather earlier to the data party. “It is great because as soon as firms see the results, they want to know more and more, and that’s exciting.”