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.

Many advisors and advisory firms have relied primarily on referrals to build their business. While this strategy has been quite effective in the past, the market downturn of the past two years has made clients more skeptical and, as a result, this avenue of growth has slowed. The problem is that many advisors and advisory firms – even some very large and successful ones – have either never actively marketed or have not done so for a long time, and are therefore beginning the process from square one. Yes, they must learn how to market.

This phenomenon was confirmed in a study of almost 700 advisors and wealth management firms conducted for Genworth Financial. Almost three quarters of the respondents plan to spend more time on marketing, and half of respondents more money on marketing; the respondents overwhelmingly acknowledge that active marketing will replace referrals as a key driver of growth.

Interestingly, and reinforcing the above point, only 32% of respondents had an actual marketing plan, and only half of these advisors and firms have actually used their plans. As growth rates have slowed with the markets decline, and referrals have waned, the difficult reality is that advisors and firms must become better and more active marketers.

That raises the interesting dilemma many firms face – recognizing that you need to develop a marketing a plan is one thing; actually figuring out how to do so is another matter! Respondents also recognized that other complementary avenues of future growth will include either acquisitions or hiring addition business development staff. Many organizations are budget-constrained today, therefore so while in theory hiring new business development and marketing employees makes sense, this might be a longer-term strategy, which does little to help replace lost assets today.

Another interesting conclusion from this study is that respondents cited delivering top-notch client service and building and maintaining efficient operations as the two top ways to generate business opportunities moving forward. I agree – happy clients will be more apt to begin giving referrals again in the future. And operating efficiently is always important. But this will take time…..

In the end, many companies are going to have to figure out how to become more active marketers – budget constraints notwithstanding – and quickly if they hope to build their assets back to previous levels.

We sent out a special issue of our quarterly newsletter today entitled “Control Your Own Destiny.”

Now that Labor Day is past, and vacations for the most part are over, the focus turns to reaching 2010 goals during the remaining months of the year and setting goals for next year.

Despite today’s economic uncertainty, and knowing that there are many things none of us can control (for example, will we have a double-dip recession?), this newsletter highlights three aspects of any business that can be controlled:

* Your Brand

* Your Target or End-Markets

* How Efficiency You Run Your Business

Click here to read the newsletter. Make the rest of the year a good and profitable one!

A recent report by Dalbar (a well-respected research firm in the financial services industry), which ranked the websites of top mutual fund companies, has some interesting implications for the entire industry. (I believe that the findings are germane to all segments of the industry – sponsor firms, investment managers, RIAs, etc. So take notice!)

Let’s start with the overall conclusion – it’s critical that websites are easy to navigate and that content is easy to find. In addition, continuity among the different features being offered is important; for example, the use of social media should complement the functionality of the website and fit naturally.

Poor functionality will lead to frustration on the part of the user and any value-added contained in additional content will be lost. An effective website must have good design (which includes the look as well as the functionality) as well as good content. One without the other is not enough. To quote an executive at a large fund family, “It’s all about getting the right content to the right person at the right time.”

In designing your website, make sure that you dedicate the necessary resources to both design and content!

There were a few other interesting findings in the report as well. The use of mobile, social media and interactive features is increasing. Again, while this is not surprising, it’s important to reiterate that the most effective sites allow clients as well as prospects to utilize the information and access the resources of the company the way that they want to – it’s all about the user! Make it user-friendly!

Finally, the “viral” component – the ability for readers to share the information with others – is growing significantly (the phenomenon is called social sharing.) People want to share content that they find useful, especially when it comes to their finances, and making it easy for them to do so helps spread your brand further – and faster!

Needless to say, I am a believer in the important role that social media has in helping to build a financial services business; it has helped me in my practice tremendously. I reviewed the best book that I have read on the topic – The Digital Handshake by Paul Chaney – in this blog on March 13th. I still think you should read the book for a great overview of the many social media outlets that are available and how they might be relevant to your particular business.

For those that are ready to jump in though, I wanted to introduce an exciting new online resource called Jarupa. Jarupa offers online courses in learning WordPress, Email Marketing, Social Media, Search Engine Optimization and much more. Click here to learn more about Jarupa. Now – for purposes of full disclosure – Jarupa is the brainchild of Angela Nielsen, a strategic partner with AK in Zenith Creative Group.

Take a look for yourself – investing a few hours of your time in an on-line class is the quickest way to make social media work for you!