Elevate Wealth Boosts Retention 15% with Client Advisory Board

Elevate Wealth Boosts Retention 15% with Client Advisory Board

Executive Summary

Elevate Wealth, facing increasing client attrition and the challenge of understanding evolving client needs, implemented a client advisory board. This initiative provided invaluable feedback on service delivery and communication. As a result, Elevate Wealth experienced a 15% increase in client retention, successfully safeguarding $66 million in Assets Under Management (AUM) and securing an additional $330,000 in annual revenue.

The Challenge

Elevate Wealth Management, a firm overseeing $440 million in AUM, recognized a growing concern: client attrition. While new client acquisition remained steady, the firm noticed a concerning trend of existing clients moving their assets elsewhere. Over the previous year, Elevate Wealth had experienced a client attrition rate of 8%, translating to approximately $35.2 million in AUM lost annually.

Marcus Williams, CFP, ChFC at Elevate Wealth, knew this couldn’t continue. Analyzing exit interviews, the team identified a recurring theme: clients felt their needs weren't being adequately understood or addressed. Many clients expressed a desire for more personalized communication and a greater sense of involvement in the firm's decision-making processes, particularly concerning investment strategies and technological updates. For example, several clients nearing retirement expressed anxiety about market volatility and felt the firm’s standard communication wasn't sufficiently reassuring or tailored to their specific risk tolerance.

Furthermore, competition in the wealth management space was intensifying. Clients had access to a wider range of options, including robo-advisors and low-fee brokerage platforms. Elevate Wealth needed to differentiate itself not only through investment performance but also through exceptional client service and a demonstrable commitment to understanding and addressing client needs. The firm's previous attempts at gathering feedback through annual surveys yielded limited actionable insights, often providing generic responses that failed to pinpoint specific areas for improvement. Marcus recognized that a more proactive and engaging approach was necessary to stem the tide of client attrition and foster greater loyalty. He aimed to decrease attrition by 50% within one year.

The Approach

Marcus Williams decided to establish a client advisory board consisting of a carefully selected group of representative clients. The board’s primary objective was to provide ongoing feedback on Elevate Wealth’s service delivery, communication strategies, and overall client experience.

The selection process was crucial. Marcus identified clients from various demographic groups, investment profiles, and tenure with the firm. He aimed for a diverse group of 10 clients, including both long-term loyalists and those who had voiced concerns in the past. These individuals were personally invited to participate, with Marcus emphasizing the significant impact their feedback would have on shaping the firm's future.

The client advisory board met quarterly, initially in person and later virtually via Qualtrics. Each meeting focused on specific topics relevant to the client experience, such as:

• Investment Performance Communication: How effectively did Elevate Wealth communicate investment performance and market updates? Were explanations clear, concise, and tailored to individual risk tolerances?
• Service Delivery: How satisfied were clients with the responsiveness of their financial advisors and support staff? Were there any bottlenecks or areas where the firm could improve its efficiency?
• Technology Adoption: How comfortable were clients with Elevate Wealth’s technology platforms and digital tools? Were there any usability issues or training gaps that needed to be addressed?
• Overall Client Experience: What were the key strengths and weaknesses of the firm’s service offering? What could Elevate Wealth do to further enhance the client experience and build stronger relationships?

Marcus also actively solicited feedback through online surveys using Qualtrics, supplementing the information gathered during board meetings. These surveys were designed to be short, focused, and easy to complete, maximizing client participation rates. The surveys covered similar topics as the board meetings, allowing Marcus to gather input from a broader client base.

He established a clear decision-making framework: After each board meeting and survey, the firm’s leadership team would review the feedback, identify key themes and action items, and develop a plan for implementing improvements. These plans were then communicated back to the client advisory board, demonstrating that their feedback was being taken seriously and leading to tangible changes.

Technical Implementation

The successful implementation of the client advisory board involved several key technical tools and processes:

• Qualtrics Survey Platform: This platform was used to create and distribute online surveys to clients, gathering quantitative and qualitative feedback on various aspects of the client experience. Qualtrics’ advanced analytics capabilities allowed Marcus to track response rates, identify trends, and segment feedback based on client demographics.
• Virtual Meeting Platform (Zoom/Microsoft Teams): Due to geographical constraints and client preferences, board meetings were conducted virtually using Zoom or Microsoft Teams. This allowed for easy participation and efficient collaboration.
• Sentiment Analysis Tools (e.g., MonkeyLearn): Marcus employed sentiment analysis tools to analyze open-ended responses from surveys and board meeting transcripts. These tools automatically identified the overall sentiment (positive, negative, or neutral) expressed in client feedback, providing a valuable supplement to manual review.
• CRM Integration (e.g., Salesforce): Feedback from the client advisory board and surveys was integrated into Elevate Wealth’s CRM system (Salesforce). This allowed advisors to track client preferences, identify potential issues, and personalize communication strategies.
• Data Analysis Software (e.g., Excel/Tableau): The data collected through surveys, board meetings, and CRM integration was analyzed using Excel and Tableau. This allowed Marcus to identify key trends, quantify the impact of the client advisory board, and track progress over time.

The ROI calculation was based on the following methodology:

1. Baseline Attrition Rate: 8% annual attrition of AUM.
2. AUM at Risk: $440 million.
3. AUM Lost Annually (Baseline): $35.2 million (8% of $440 million).
4. Increased Retention Rate: 15% reduction in attrition.
5. New Attrition Rate: Original attrition - (original attrition * increased retention rate) = 8% - (8% * 15%) = 6.8%.
6. AUM Lost Annually (After CAB): $30.14 million (6.8% of $440 million).
7. AUM Retained: Original AUM lost - new AUM lost = $35.2 million - $30.14 million = $5.06 million.
8. AUM Impact from Retention: $440 million * 15% = $66 million AUM retained
9. Average Advisory Fee: 0.5% per year.
10. Annual Revenue from Retained AUM: 0.5% of $66 million = $330,000

Results & ROI

The client advisory board proved to be a resounding success, delivering significant and measurable results for Elevate Wealth:

• Client Retention: Client retention increased by 15% within one year of implementing the client advisory board. This translates to an additional $66 million in AUM retained, compared to the projected attrition rate without the advisory board.
• Revenue Impact: The increased client retention generated an additional $330,000 in annual revenue for Elevate Wealth, based on the firm's average advisory fee of 0.5% of AUM. This represents a significant return on investment for the time and resources invested in establishing and managing the advisory board.
• Improved Client Satisfaction: Client satisfaction scores, as measured through post-meeting surveys, increased by an average of 12%. Clients reported feeling more valued, understood, and involved in the firm’s decision-making processes.
• Enhanced Service Offerings: Feedback from the advisory board led to several tangible improvements in Elevate Wealth’s service offerings, including:
  • More Personalized Communication: Tailoring communication based on client preferences and risk tolerance, resulting in a 20% increase in clients reporting "very satisfied" with communication.
  • Enhanced Technology Training: Providing additional training and support on the firm’s technology platforms, reducing tech-related client inquiries by 30%.
  • Proactive Portfolio Reviews: Implementing more frequent and personalized portfolio reviews, addressing client concerns about market volatility and investment performance.
• Increased Client Referrals: Client referrals increased by 8% as existing clients became more enthusiastic advocates for Elevate Wealth.

The firm also identified that, on average, clients involved in the advisory board held 15% more of their investable assets with Elevate Wealth than comparable clients not involved in the board. This suggested a deeper level of trust and loyalty among the board members.

Key Takeaways

For other RIAs looking to improve client engagement and retention, here are some key takeaways from Elevate Wealth’s experience:

1. Actively solicit client feedback: Don't rely solely on annual surveys. Implement ongoing mechanisms for gathering client input, such as client advisory boards and regular check-in calls.
2. Create a representative board: Ensure your client advisory board includes clients from diverse backgrounds, investment profiles, and tenure with your firm. This will provide a more comprehensive understanding of your client base.
3. Act on feedback: Don't just listen to client feedback – take action. Develop a clear plan for implementing improvements and communicate these plans back to your clients.
4. Measure the impact: Track the results of your client engagement initiatives, such as changes in client retention, satisfaction, and referrals. This will help you demonstrate the value of your efforts and identify areas for further improvement.
5. Embrace Technology: Use technology to streamline the process of gathering, analyzing, and acting on client feedback. Tools like survey platforms, sentiment analysis software, and CRM systems can significantly enhance your client engagement efforts.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors identify at-risk clients, personalize client communication, and optimize portfolio performance. Visit our tools to see how we can help your practice.