Understanding and improving customer satisfaction in wealth management

February 7, 2023


Globally recognised expert in applied decision science, behavioural finance, and financial wellbeing, as well as a specialist in both the theory and practice of risk profiling. He started the banking world’s first behavioural finance team as Head of Behavioural-Quant Finance at Barclays, which he built and led for a decade from 2006.

Understanding and improving customer satisfaction in wealth management

Adopting a behaviourally conscious approach to client understanding, enabling personalised advice at scale, is the best way to upgrade customer satisfaction with their wealth-management experience.

A satisfying customer experience is front and centre of every adviser website. It's at the heart of the regulations, especially the most recent ones. And one way or another, it's the focus of the ways in which wealth-management firms are using digital means to make their services more efficient, effective, and enticing.

But what really is it? Do we know what makes experiences more satisfying… and what firms can do to make them more reliably so?

Common measures of customer satisfaction don't lead to more satisfied customers

Most customer satisfaction surveys will only take you so far. Asking customers to pick from a limited menu of answers – as such surveys must – inevitably leads to a limited range of useful applicable insights.

A common trap in attempts to enhance customer experience is to believe it's better to implement a solution for which there is 'evidence' (‘76% of our customers prefer to receive communication by email’), even if that evidence is irrelevant to the problem trying to be solved (‘what does this individual customer prefer?’).

'On average' answers to general questions, such as 'how much do you like your service?', can be great for management information, but they're borderline irrelevant to individual investors. Even questions that target specific concerns can’t lead to effective targeted solutions to those concerns, because almost always in questions concerning humans and their money, what works for one investor may well not work for the next one. Measuring what works ‘on average’ can conflict with what works when applied to an individual.

But just because client satisfaction can’t be directly measured in a way that links to how to improve it for each individual investor, that doesn’t mean it can’t be analysed and improved by other means.

The fact that individual answers will inevitably conflict is not a reason to abandon all attempts at personalised understanding; it’s simply a reason to find a better way to do it.

Improving client satisfaction requires a personal, psychological, touch

A satisfying experience is a function of feeling understood. In many ways, this is determined by the ineffable subtleties of each face-to-face relationship that no protocol or checklist can do much about, and certainly not at scale. However, that still leaves a lot that can be done around the edges. How detailed should a report be? What's the ideal frequency of communication? How much involvement in decision making do clients prefer? The answer to each of these is, of course, ‘it depends’.

What ‘it’ depends upon is each individual’s recipe of psychological traits, tendencies, and preferences, ideally refined by an iterative, ongoing, feedback loop.

For example, using the wealth of data from Oxford Risk’s financial personality assessment, combined with our behavioural expertise, we can first predict, and then confirm, which investors are better served by frequent, high-level communication, and which by more detail, delivered less-frequently. Or, in times of market turmoil, which investors are likely to be reassured by which type of messages… especially important when the same message for one type of client could trigger the very behaviours it helps guard against for another.

Personalisation at scale is the best focus for the digitalisation of advice

The key to successfully applying individual insights at scale is to approach customer satisfaction in a way that’s built on behavioural understanding, and that uses tech to expand that understanding into places it could not otherwise reach.

There are three main stages to this:

  1. Understanding – Effective personalisation relies on effective understanding. A true understanding, one that helps shape both advice, and how it’s delivered and managed goes way beyond demographics and account size. The right digital tools can turn the tools of understanding into personalised outputs, and do so at scale.
  2. Engagement – A behaviourally conscious approach to client satisfaction isn’t limited to advisers better understanding their clients. It can also help clients better understand themselves. This is (ideally) an ongoing, iterative process that cultivates increasing client comfort and confidence with being an investor, rather than merely owning investments: thereby levelling up their engagement with the whole investment experience.
  3. Evidence – When it’s hard to measure something, it’s easy to overlook proving it’s happened. In a regulated environment increasingly focused on ensuring that advice considers clients’ quirky human qualities as well as their more robotic balance sheets, a trustworthy psychological assessment and a digital audit trail linking it to your recommendations is a powerful tool.

As we looked at in more detail in our Digital and Hybrid Advice Transformation Guide, a scientific approach to behavioural analysis of individual investors is the most effective option for using digital tools to support the advice process. While many potential avenues for digitalisation lead only to greater efficiency in background administrative tasks, often increasing the distance between an adviser and client, the best behavioural digital tools bring them closer together.

Gain the deepest possible insights on your clients, enabling you to offer hyper-personalised investment journeys with Oxford Risk’s digital solutions. Click here to discover how to improve your investor journey and customer experience, keeping clients invested for longer during periods of market volatility whilst reinforcing the value of your financial advice.

Download the digital and hybrid advice transformation guide now.

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