Investors are becoming increasingly dissatisfied with their advisors, says the 2012 J.D. Power and Associates Canadian Full Service Investor Satisfaction Study.
The survey finds client sentiment has declined for the second consecutive year in Canada, as their relationships with their advisors are weakening.
Nationwide, customer satisfaction with full-service Canadian investment firms averages 720 out of 1000, declining 13 points over 2011. In contrast, satisfaction in U.S. full-service firms has actually risen for two consecutive years to 775.
“Investors in Canada are less satisfied with their firms, in large part, because their advisors are not keeping them up-to-date with market trends and catering to their needs,” says Lubo Li, senior director of the financial services practice at J.D. Power and Associates.
Canadian clients rate their advisors 7.8 out of 10 on average, compared to 8.4 in the U.S. Additionally, they rate them 7.4 out of 10 for promptness in delivering market news and trends reports.
“External factors do play a role in overall dissatisfaction, but they also present an opportunity for advisors to deepen their relationships by managing expectations, and providing timely advice to navigate the tenuous market,” says Li.
Advisors need to support their clients, as well as prepare them to take advantage of the market when it starts to improve, he adds.
Doing so will help you gain referrals and boost your bottom line, since 77% of satisfied investors say they would recommend their primary firm, and 27% plan to increase their managed assets over the next year.
In contrast, only 4% cent of discontented investors, however, will mention your firm to their contacts. And only 14% will invest more funds.
Ensuring good customer service doesn’t rest solely on the advisor, though, says Li. “Improving customer service starts at home office; firms that support their advisors with tools, technology, and training and education will come out on top.”
The study identified these key tools:
- Tools and programs that help advisors spend more time with investors and less time completing administrative tasks;
- Ongoing training and education focused on client engagement;
- Benchmark comparisons online and in account statements, which facilitate advisor-client performance discussion;
- Balanced advisor-to-investor ratios, to ensure planners have enough time to serve all customers equally.
Raymond James ranked highest among all full-service investment firms in Canada with a score of 745 out of 1000. They provided good advisors, performance and account information, says the study. Following close behind was Edward Jones (735) and TD Waterhouse Private Investment Advice (731).