A recent study by Chatham Partners and Investment Metrics found that 40% of client satisfaction for institutional investors is attributable to service-related factors. 60% of overall satisfaction is related to investment performance. (I would venture to add that similar if not higher results titled toward client service would be found on the retail side of the business and that the results are applicable to all industry segments.)
My initial reaction is that if any organizations did not know the importance of client services before they read this article, they are in big big trouble. Further, I would guess that these firms have already lost significant assets and are pretty far behind the eight ball. Especially after the markets of the past few years, you have to wonder whether any firm can survive without a solid client service team and strategy.
Now that I have gotten that off of my chest, I did find the following interesting – the study identified five factors that are critical to a managers’ success:
1) Including the market and investment knowledge of the portfolio team;
2) The clarity of the investment reports;
3) The client representative’s problem-solving skills;
4) The frequency of contact for the client service representative; and
5) The timeliness of the manager’s investment reports.
Yes, client service matters – and the companies that succeed are able to incorporate client service into their practices in a systematic and efficient manner. It is worth looking at your own client servicing capabilities to see if there are improvements that can be made.
