/Here’s How Investment Firms Buy Your Loyalty

Here’s How Investment Firms Buy Your Loyalty

Trusted investment professionals who offer sound advice and maintain great relationships with clients—full-service brokerage firms work hard to attract and retain these stars. Such advisers attract investable assets that generate reliable revenue for the firm. Yet brokerage firms are caught in a bind. The benefits of customer loyalty can easily accrue to the adviser, not the firm. If clients feel strong ties to the adviser, then an adviser who switches firms has a good chance of taking many customers with him or her.

How can brokerage firms resolve this tension? Bain & Company’s analysis of a new survey by J.D. Power of 6,500 investors in the US suggests that firms can capture more of the benefits from loyalty by raising their game in two areas: providing sound advice, and offering an excellent digital experience around planning, reviewing and adjusting investments.

Digital intensity in a customer’s interactions is correlated with a higher Net Promoter Score® (a key metric of loyalty) for the firm, as opposed to the individual adviser, the survey shows. Firms with the highest loyalty scores—USAA, Fidelity and Charles Schwab—also lead their peers in the degree of their digital, self-serve model.


Read More at Forbes.com