This post is part of Â鶹´«Ã½AV's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.
The keys to success in any relationship -- whether romantic, business, or otherwise -- include both communication and action. This holds true in financial investing as well, where the relationship between the Relationship Manager (RM) and the customer can take one of two paths: 1) a successful path where both parties understand and trust each other, or 2) an unsuccessful path where communication and trust drop to subterranean levels and contribute nothing positive to the financial bottom line.
Â鶹´«Ã½AV's 2012 Mass Affluent Investor study revealed that successful RMs do more than just take orders. Instead, they actively contribute to their relationships with customers and have significant influence on customers' feelings of success. More than half (56%) of mass affluent investors were satisfied with their RM while nearly three-quarters (71%) of successful mass affluent investors were satisfied with their RM. For those who attribute that success to their advisors in the latter group, the RM satisfaction rating soared to 87%. This speaks volumes about the RM role in investing, as the most successful investors were also the most satisfied with their financial partners.
The data aren't saying that RMs need to be important fixtures in their customers' lives. Rather, they just need to be an important fixture in their customers' financial investing lives. The overarching themes of investing success are communicating with customers and being knowledgeable about investing. When RMs act on these themes they build trust, confidence, and feelings of reliability with their customers. RMs must also deliver on their commitments. If they make a promise, they have to fulfill it. For example, if an RM says they are going to review a customer's portfolio for any changes, then they should present their recommendations by the deadline.
RMs who make their customers feel successful received high ratings in the following categories:
1. Inspires confidence. RMs have to act as their customers' cheerleaders but, most importantly, they have to provide advice and recommendations that make sense to their clients. If customers feel their RM is making the right suggestions that closely match their needs and goals, then they will experience an uptick in satisfaction. Customers have to see that their RM is not just reading tea leaves, but that they know how investing works.
2. Provides the best possible financial advice. Along those same lines, customers are looking for the best advice. If the RM doesn't provide them with the best advice, why should they even bother with the relationship? What would the RM have to offer? Advice is often packaged with communication, meaning RMs have to listen to customers' needs and offer suggestions to satisfy those needs.
Trusted RMs ranked high on successful investors' rating sheets. But when we examine the importance of the advisor in an investor's success, we found that following through on commitments was one of the strongest factors in that success.
3. Delivers on commitments made to you. If the RM makes a commitment to the customer, they should stick to it. Customers rely on their RM to provide everything they need to be successful. RMs that deliver on those commitments become that important piece of the successful investor process. In other words, when customers say that advisors were an important part of their financial success, delivering on commitments stood out among the other factors that differentiated these advisors from everyone else.