I recently blogged about the issue of performance and the importance from the perspective of a wealth creator. For more background you may want to read, “Investment Performance; How Important is it?”
I continue to be amazed that financial advisory firms aren’t listening to their own client’s, let alone the surveys.
The message from clients is very clear:
Wealth creators care deeply about investment performance…but not as much as effective communication.
Communication about who they are, where they are going, what is important to them and what they are worried about. Communication about investment solutions and strategy that is in their language and not industry jargon.
This week I was having coffee with a colleague at another wealth management firm. During our conversation, we disagreed on this issue of what a client really wants from their financial advisory relationship.
He was arguing that through his firms substantial investments focused on generating portfolio out-performance, they would be clearly differentiated from other wealth management alternatives in the eyes of wealth creators.
I totally agreed that adding value through investment performance was critically important, but that true company differentiation would come through seeing the issues facing client’s from their perspective; reducing the complexity in their lives, creating freedom to pursue the things they love. Wealth creators would gravitate to that first.
He went on to share that a secondary focus of his firm was to enhance the way information was gathered and shared with clients; significantly improving relationships with their clients.
I agreed completely and said the following:
Let’s put it this way, if your company was split into two publicly traded stocks; Company A—the performance company, and Company B—the enhanced communication company…
I would buy 300 shares of Company A, but…I would buy 1000 shares of Company B.
It isn’t that Company B (communication company) is better than Company A(enhanced performance company) by a factor of 3x, but instead, finding a trusted advisor that understands the value of communication will yield ecstatic clients, and clear differentiation.