High performing mid-tier financial services firms add value to their existing client base and have fewer acquisitions, according to Macquarie.
The firm’s accounting and financial services benchmarking report found the number one driver for client satisfaction was the feeling that their adviser valued their business and relationship with the firm.
Macquarie Wealth Management division director, David Clatworthy, and head of client strategy, Sherise Mercer, said the data found clients of firms responded well to the foundation of managing risk and return outcomes as well as understanding their needs.
“Advisers who spent a greater proportion of their time discussing life goals, what’s important to their clients and using those soft skills and that emotional intelligence to build the relationship with clients was where clients walked away with a greater sense of understanding and value,” Mercer said.
“The points when clients felt they were valued was when they got the right level of information from their adviser and also that their adviser helped improve their financial knowledge.”
Clatworthy noted that higher performing firms were purposeful about their engagement with their client base.
“They use of technology and the key partners of the firm are allowing themselves enough time to sit back and think about the firm engagement and how that looks,” he said.
The report found below-average profit firms were most likely to look outside their business for profitability growth, with 50 per cent reporting new client acquisition as a key profitability driver, compared to 32 per cent of high performers.
“With the high performing firms the need to acquire practices to meet the year-on-year growth is lower than lower performing firms which need to keep on acquiring new firms to try and keep up with the growth trend,” Clatworthy said.
Mercer said these high performers did not necessarily have to rely on acquisitions as they generated organic growth and focused on their existing client base.
Mercer noted that the below-average performing funds had leadership issues where the leaders tended to be stuck dealing with emails and were drowned in paperwork rather than fulfilling their leadership role.
