Is your prospective client a gruff millionaire who makes stiff demands and is given to secretly scribbling copious notes? Watch out, he or she could be a mystery shopper trained to test your mettle—and merit—as an advisor.

But wait, there’s no way you can call the bluff.

UBS, the global financial services firm, has perfected the process to an art and has been using high-net-worth mystery shoppers for years to refine its level of service in the wealth-management sector. These bona fide millionaires agree to pose as potential clients and their evaluations get reported back to the firm’s Zurich-based research team. The process takes six months to a year, and quite closely resembles the real deal.

And it isn’t nearly as frivolous as it sounds. The firm has standardized methodology and a list of 142 factors it tests its advisors on, every two years.

The mystery shoppers are trained to ask specific questions, behave a certain way—essentially not give themselves away. They’re also tutored to show some serious attitude and toss off phrases like, “I’ve got 30 minutes; convince me to stay here 45.” Each mystery shopper is assigned to judge one advisor at UBS Bank and one at a competing firm.

Not everyone qualifies—definitely nobody with less than $2 million in assets. And to make sure the exercise isn’t perceived as a marketing spin, the mystery shoppers sign an agreement saying they won’t become UBS clients for one year.

Grant Rasmussen, president and CEO of UBS Bank (Canada) says the idea is to provide deluxe service no matter where in the world ultra-affluent clients go, and to reinforce the brand. He likens it to providing the “Lexus experience.”

“It’s a long, expensive process involving large cash incentives—definitely in the six figures,” he says.

“Our average client relationship lasts 49 years. If we lose a client after five or six years we essentially lose out on managing their assets for 30 to 40 years. So the money and research spent on retaining a lifetime of client wealth may be expensive, but considering the long-term impact we get out of it, it’s cheap.”

Better than the best

Rasmussen’s team hopped onto the mystery shoppers’ wagon in 2005, “not only to track against competitors but also against ourselves,” he says.

Their list of Canadian competitors includes banks, firms and family offices that serve the ultra-rich, and varies from year to year based on names that come up more often than others.

“If a competitor beats us on certain measures, we want to know what they are, and where we need to improve,” he notes. “We also look at brands that have built a name for service across different sectors in the industry. We’ll steal a good idea from anybody.”

The judging starts long before the con client is seated before the unsuspecting advisor—at the door literally—from little housekeeping details such as how the client was greeted at reception, what drink was served, and how long he or she was made to wait—to how many questions the advisor asked at the first meeting, or even what the first conversation was about.

According to executive director Angela Wiebeck, the first thing that stood out during the 2005 survey was how important it is to make the right first impression.

Graeme Harris, executive director of corporate communications, agrees. “You could have a receptionist who’s great on the phone, but it’s not to much avail if he or she doesn’t make the people who walk in the door feel warm and welcome.”

Protecting privacy, he says, is also big. “Leaving a $100 million client in the front lobby and not getting him into a room relatively quickly is not doing much to protect his privacy.”

When critiquing service, some clients notice the big picture while others discern the minutiae, down to the quality of the coffee served. And sure enough, UBS takes note of every little critique, even if it entails changing the choice of java.

“We moved more up-market with quality and variety. From mild, medium, bold, we went on to having a full top-of-the-line espresso machine,” Rasmussen says.

It doesn’t stop there. Just like any quality-conscious hotel, the bank also keeps a database of client preferences—they wouldn’t be caught dead offering caffeine to the green-tea types, or juice to the aqua-inclined.

The results have started showing. According to Wiebeck, every mystery shopping exercise brings back better scores for the home team. “Our competitors decreased from satisfactory to partially satisfactory, while we went from being good to very good.” And things don’t just look good on paper. Rasmussen says from the first time UBS was mystery-shopped in 2005, it has seen significant improvement in numbers: the closing rate has increased and the retention rate is higher.

“It was great to have learned a lot of the stuff before the crisis,” he says. “Where a lot of firms saw a huge outflow of clients, we didn’t.”

Follow-up on feedback

Sam Sivarajan, managing director and head of Private Wealth Management Canada, says the process is fairly transparent. “Once we receive tabulated feedback from the research team and know what areas we need to push the bar, we share the results and findings of the mystery-shopping experience—where we did well, where we underperformed, etcetera with everyone involved. Even new advisors have the benefit of leveraging what we learned in the past.”

Advisors who routinely score well with mystery shoppers are, above all, fantastic listeners. Women sometimes even more so than men.

“The guys tend to grab the microphone, women listen. They have a higher level of empathy, and are less concerned about showing how smart they are. They like to ensure the client understands what they’re talking about,” Rasmussen notes.

Since mystery shopping is too expensive to repeat every few months, the UBS gang also resorts to role-playing. Everyone’s involved, even the CEO sometimes plays client as the interactions are videotaped and analyzed.

As part of the role-play, advisors are given exactly 30 minutes to make their cases. “If you don’t respect your clients’ time, you don’t respect them,” Rasmussen says.

Advisors are also trained to bring up fees within the first three minutes of the meeting. The idea is to uncover the elephants in the room; and then start building trust.

The exercise, however, isn’t meant to be a dampener. While everyone gets an overall report, individual scores are kept confidential, and made available only to the advisor concerned.

A-ha moments

For Sivarajan, the biggest eye-opener has been that there’s no such thing as bothering your clients. They don’t mind the regular contact. “If you’re annoying them, they’ll let you know.”

Rasmussen’s big lesson has been the importance of taking a step back before diving into money talk. It’s essential to find out more about the client before using the ‘I’ word. “Train advisors to say, ‘We’ll get there, but not yet.’ ”

Mystery shoppers have also taught him client experience weighs heavier than portfolio results. “Clients don’t understand how to measure performance, they all want some degree of growth.

“But what they really want is to be understood. They need a plan first, performance is a secondary objective. We start with the end in mind, figure out what they need and then decide the amount of risk they need to handle,” he adds.

Rasmussen also underscores the significance of diligent follow-up. “Clients tell you things they’re worried about, but then you’ve got to do something about it. A lot of them come in quite tense. They’ve had tough experiences and are quite jaded. As you knock their worries off one by one, it’s like they’re shedding pounds in front of you. They literally tend to relax more, laugh more.”

The underlying philosophy, Rasmussen says is, “No advisor owns the client; the client owns the client. If they decide they no longer click with an advisor, we switch advisors.”

Wiebeck says advisors appreciate that too. “No sense being stuck with someone you don’t match with.”

Shoppers’ Delight

Advisors who consistently do well at the table with mystery shoppers tend to:

  • Be fantastic listeners;
  • Ask a lot of questions;
  • Be highly organized and inquisitive;
  • Have a concrete plan;
  • Be detail-oriented;
  • Be vigilant note-takers;
  • Perform a detailed analysis;
  • Make complex financial concepts simple for their clients; and
  • Take client feedback seriously enough to incorporate it into subsequent proposals.

Shopping List

Mystery shoppers evaluate advisors on a list of 142 factors. Here’s a small sampling.

  • Did a second advisor attend the first meeting?
  • When the advisor introduced himself of herself to you, did he or she mention his or her certification (e.g. certified financial planner etc.)?
  • How many days following the original notification to an advisor did it take for him or her to call you?
  • Was the advisor prepared for the meeting (i.e. had he or she already taken action on the information from the telephone call, did he or she have the necessary documents, etc.)?
  • After the advisory meeting, when you asked the receptionist about a train connection, restaurant or directions, were you satisfied with the response?
  • Did the advisor use language that was easy to understand, making generous use of examples or illustrations (pictures, graphs, charts, etc.)?
  • Did the meeting take place without any major interruptions or disturbances?
  • Did the advisor listen attentively to what you had to say?
  • Were the advisor’s clothes clean and smart?
  • Did the advisor offer to organize the steps required to transfer your assets?

Originally published in Advisor's Edge