For just about any practitioner to lose clients is bad, but losing 50% or more of their clients in a year would be a disaster. It is enough to jeopardise a practice entirely of course, but even in a best case scenario it will hurt horribly, and for quite a long time.
It is a very real possibility too, especially if you are dealing at the top end of the market or with a relatively small client base because there is one area where they have a rapidly shifting expectation. The high net worth or affluent who are most discerning and are the ones who have the most options to walk away if expectations are not met, and their expectations in digital engagement are very high. And getting higher by the month.
Some research done by Capgimini a little while ago on digital engagement contained 2 statistics stand out:
The first (56%) was the proportion of clients who say they would leave their wealth management adviser/firm if they become digitally dissatisfied.
The second was a more alarming number: 100% of those who say they are dissatisfied do actually leave.
So; over half say they would go if digitally dissatisfied and then they actually follow through on that. They mean what they say.
For those practitioners who may be reading thus far and who are not in the wealth management space…hang in there, because I believe this applies to your clients just as much as any financial planners’. The thing we should remember about the High Net Worth clients who are far more likely to engage a holistic planner on a pure fee basis is that they are the “early adopters”. They are the leading edge that the rest of consumer-land seeks to emulate and follow. More often than not what we see the affluent clients do becomes the very behaviour that most other clients who are not quite so well off end up doing in time too.
For example; 10 years ago ONLY the HNW paying for financial planning or investment expertise actually paid an adviser a fee for it. Now clients are paying advisers for lending advice, risk advice, simple retirement planning advice, etc, etc
The market has followed the HNW early adopters.
So we should be worried, regardless of our advice discipline or current business model about ensuring that our clients do not become “digitally dissatisfied“.
What is “digitally dissatisfied” though? It is the client-driven demand for technology to add speed and convenience to their professional relationships. It is more than a nice facebook page. It is state of the art (fast!) equipment and software that enables them to access information, you, your firm and anything else which is part of the service package. Fast, convenient, able to be accessed from multiple portable devices on their part….and secure.
Fail to deliver in any of these areas and those high end consumers today become “digitally dissatisfied”. And more than half of them said if that happened they would leave their advisory firm. 100% of those who said they would, have done so.
This can happen to any practitioner too in time, even if wealth management services to the High Net Worth are not the target market of the firm. Think of that segment as the consumers who seek professional advice as being a “leading indicator” of future (other) consumer preferences. They will be followed by others who don’t have the same wealth, but who do have the same lifestyle, net worth and service expectations.
These people expect professional practices to be connected and savvy users of technology. That means things move at light speed, and our service or advice is constantly accessible via whatever equipment and whatever platform is leading edge.
Be warned: Digital Dissatisfaction on the part of your target market or existing clients could be disastrous.