Boosting Client Satisfaction Scores by 15% with Structured Expectations

Boosting Client Satisfaction Scores by 15% with Structured Expectations

Executive Summary

Harrington Legacy Advisors, a growing RIA, faced increasing client dissatisfaction due to unclear expectations surrounding onboarding processes, services, and fees. Golden Door Asset partnered with Harrington to develop a comprehensive onboarding guide, proactively addressing these issues. The result was a significant 15% increase in client satisfaction scores within six months, coupled with a noticeable reduction in client support requests, demonstrating the power of clear communication in fostering client trust and retention.

The Challenge

Harrington Legacy Advisors, managing approximately $250 million in assets for over 200 clients, experienced a concerning trend: declining client satisfaction scores. A closer examination revealed that much of the dissatisfaction stemmed from the initial onboarding phase. New clients, often unfamiliar with the intricacies of wealth management, felt overwhelmed and unclear about what to expect.

Specifically, clients reported confusion in the following areas:

• Service Scope: Many clients were unclear about the specific services included in their advisory fee. For instance, several clients with assets between $500,000 and $1 million believed they were receiving comprehensive financial planning services when their fee only covered investment management. This misunderstanding led to frustration and the perception that Harrington was not delivering the promised value.

• Fee Structure: The firm used a tiered fee structure, charging between 0.85% and 1.25% of assets under management (AUM) annually. However, the fee structure was often presented in a complex manner, leaving some clients feeling they were paying more than expected. One client, with $750,000 AUM, incorrectly calculated his annual fee to be $12,000 instead of the actual $7,125 (0.95% fee rate), resulting in a heated exchange with the client service team.

• Communication Protocol: Clients expressed uncertainty about how and when to contact their advisors and what the expected response time was. Some clients expected immediate responses to emails, leading to frustration when they didn't receive them within a few hours. Others were unsure if they should contact their advisor directly or go through the client service team. The lack of a defined communication protocol created inefficiency and eroded client confidence.

• Client Responsibilities: While Harrington required clients to provide updated financial information annually, many clients were unaware of this responsibility. This led to advisors making investment decisions based on outdated data, potentially jeopardizing client portfolios. One client, for example, had changed jobs and significantly altered their risk tolerance, but failed to inform Harrington. This resulted in an unsuitable investment allocation that underperformed the market and prompted a formal complaint.

These issues collectively resulted in a net promoter score (NPS) decline of 8 points over the previous year and an increased client attrition rate of 1.5%, translating to approximately $3.75 million in lost AUM. Harrington recognized the urgent need for a solution to address these onboarding challenges and improve client retention.

The Approach

To address the challenges, Golden Door Asset collaborated with Harrington Legacy Advisors to develop a comprehensive and structured onboarding process centered around a detailed client onboarding guide. The core strategy focused on proactive communication, transparency, and setting realistic expectations from the outset.

Here's a breakdown of the approach:

1. Needs Assessment: Golden Door Asset conducted a thorough assessment of Harrington's existing onboarding process, identifying pain points from both the client and advisor perspectives. This involved reviewing client feedback, analyzing support ticket data, and interviewing advisors to understand their experiences.

2. Onboarding Guide Development: Based on the needs assessment, Golden Door Asset created a comprehensive onboarding guide. The guide included the following key sections:

   • Welcome and Introduction: A welcoming message from the firm's principal, emphasizing the firm's commitment to client service and long-term financial success.
   • Firm Overview: A detailed description of Harrington Legacy Advisors, including its mission, values, and investment philosophy.
   • Services Offered: A clear and concise explanation of the services included in the advisory agreement, differentiating between core services and optional services with associated fees. Specific examples were provided to illustrate the value proposition of each service. For example, the guide explained how the financial planning service helped clients with retirement projections, estate planning coordination, and tax optimization strategies, potentially saving them thousands of dollars annually.
   • Fee Schedule and Transparency: A transparent explanation of the firm's fee structure, including a detailed breakdown of how fees are calculated. This section included examples of fee calculations for different AUM levels to eliminate any ambiguity. A specific example showcased how a client with $1 million AUM would pay $9,500 annually at the 0.95% fee rate.
   • Communication Protocol: A clear outline of how and when clients could contact their advisors, as well as the expected response time. The guide specified different communication channels (phone, email, video conferencing) and their respective response time expectations (e.g., emails will be responded to within 24 hours).
   • Client Responsibilities: A clear statement of client responsibilities, including the requirement to provide updated financial information annually and to promptly inform the firm of any significant life events that could impact their financial plan.
   • Privacy Policy and Data Security: An explanation of how client data is protected and used, ensuring compliance with relevant regulations.
   • FAQ Section: A comprehensive FAQ section addressing common client questions and concerns.

3. Onboarding Process Implementation: The onboarding guide was integrated into a revised onboarding process, which included the following steps:

   • Initial Consultation: During the initial consultation, the onboarding guide was presented to prospective clients and reviewed in detail by the advisor. Advisors were trained to address any questions or concerns that clients might have.
   • Welcome Package: After signing the advisory agreement, clients received a welcome package that included a printed copy of the onboarding guide, along with a personalized welcome letter and other relevant materials.
   • Follow-Up Meetings: The advisor scheduled regular follow-up meetings with the client during the first three months to reinforce key information from the onboarding guide and address any remaining questions.
   • Client Portal Access: Clients were granted access to a secure client portal where they could access the onboarding guide, view their account statements, and communicate with their advisor.

4. Training and Support: Golden Door Asset provided comprehensive training to Harrington's advisors and client service team on the revised onboarding process and the use of the onboarding guide. This ensured that everyone was equipped to effectively communicate with clients and address their concerns.

5. Feedback Loop: Golden Door Asset established a feedback loop to continuously improve the onboarding process. This involved collecting client feedback through surveys and interviews, as well as tracking key metrics such as client satisfaction scores and support ticket volume.

Technical Implementation

The technical implementation involved several key elements to ensure the effectiveness and accessibility of the onboarding guide and related processes.

• Onboarding Guide Development: The onboarding guide was created using a responsive HTML template to ensure optimal viewing on various devices (desktop computers, tablets, and smartphones). The template was designed with a clean and user-friendly interface to enhance readability.

• Secure Client Portal: The onboarding guide was hosted on Harrington's secure client portal, which was built on a platform compliant with industry-standard security protocols, including SSL encryption and two-factor authentication. Access to the portal was restricted to authorized users only.

• CRM Integration: The client onboarding process was integrated with Harrington's customer relationship management (CRM) system. This allowed advisors to track the progress of each client through the onboarding process and to document all communication with clients. Specific CRM fields were added to track the date the onboarding guide was shared, the date of the first follow-up meeting, and any client questions or concerns.

• Client Satisfaction Surveys: Client satisfaction surveys were administered using SurveyMonkey. The survey included questions related to the clarity of the onboarding process, the helpfulness of the onboarding guide, and the overall satisfaction with the firm's services. The survey used a five-point Likert scale, with options ranging from "Strongly Disagree" to "Strongly Agree." The Net Promoter Score (NPS) was also tracked.

• Data Analysis: Data from the CRM system, client satisfaction surveys, and support ticket system was analyzed using statistical software to identify trends and patterns. This analysis helped to identify areas for improvement in the onboarding process. Statistical significance was tested using t-tests.

• Fee Calculation Verification: A custom-built fee calculation tool was integrated into the client portal. This tool allowed clients to input their AUM and instantly calculate their annual advisory fee based on the firm's tiered fee structure. This transparency helped to alleviate concerns about hidden fees or incorrect calculations.

Results & ROI

The implementation of the structured onboarding process, centered around the detailed onboarding guide, yielded significant positive results for Harrington Legacy Advisors.

• Client Satisfaction Score Increase: Client satisfaction scores, as measured by post-onboarding surveys, increased by 15% within six months. The average satisfaction score increased from 3.8 to 4.4 out of 5.
• Net Promoter Score (NPS) Improvement: The firm's NPS increased by 12 points, indicating a significant increase in client loyalty and advocacy. The NPS score went from 35 to 47.
• Reduced Client Support Requests: The number of client support requests related to onboarding issues decreased by 30%. This freed up the client service team to focus on other important tasks. Specifically, the average number of onboarding-related support tickets per month decreased from 20 to 14.
• Lower Client Attrition Rate: The client attrition rate decreased by 0.8%, resulting in the retention of approximately $2 million in AUM. This represents a significant cost savings for the firm.
• Increased Client Referrals: The number of client referrals increased by 10%, demonstrating increased client satisfaction and willingness to recommend the firm to others. This resulted in approximately $1.5 million in new AUM.
• Advisor Time Savings: Advisors reported spending an average of 20% less time on onboarding-related tasks, allowing them to focus on more strategic activities such as client relationship management and business development. This translated to an estimated $5,000 in cost savings per advisor per year.

The financial impact of these results was substantial:

• Increased AUM: $3.5 million
• Reduced Support Costs: $2,000
• Increased Referral Revenue: $15,000
• Advisor time Savings: $25,000
• Total ROI: $45,500

Key Takeaways

Here are 3 actionable insights for other RIAs and wealth managers looking to improve their client onboarding process:

1. Prioritize Transparency: Clearly communicate your fee structure, services offered, and communication protocols upfront. Don't wait for clients to ask questions; proactively address potential concerns. The ROI from structured transparency will significantly impact client relationships.
2. Develop a Comprehensive Onboarding Guide: A well-designed onboarding guide is a valuable resource for both clients and advisors. Ensure that it is easy to understand, accessible on multiple devices, and regularly updated.
3. Solicit and Act on Client Feedback: Regularly solicit client feedback and use it to improve your onboarding process. This demonstrates that you value their opinions and are committed to providing excellent service.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors identify at-risk clients, automate compliance tasks, and personalize investment recommendations. Visit our tools to see how we can help your practice.