In Volatile Market Conditions, Use CRM to Strengthen Client Relationships

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InvestmentNews reports that Cerulli Associates Inc. just conducted a survey of 7,800 investor households. Cerulli’s research indicates that investors, particularly high net worth investors, tend to work with multiple financial advisors, especially during stock market routs. Specific findings of note include the following:

  • Nearly 25% of households work with multiple financial advisors.
  • 33% of households with between $2 million and $5 million of investible assets work with multiple financial advisors.
  • 58% of households with greater than $5 million of investible assets work with multiple financial advisors and they are now maintaining a smaller portion of their investments with their primary advisor. The number of these surveyed ultra-affluent households that keep over 90% of their investments with their main advisor has fallen from 30% in 2008 to 13% in 2010.
  • There are some wide gaps and differing opinions on who actually is the primary financial advisor for a household with a portfolio worth more than $5 million. While 73% of advisors stated they were the main source of financial advice for a particular client, only 34% of these clients considered that advisor to be their primary advisor.

The intense stock market volatility of the past few weeks has instilled fear in many investors, and caused them to pursue additional advisory relationships. During bear markets and market corrections, convenience and consolidation of assets take a backseat to investment preservation. Investors are choosing to hedge their risk via diversification across not only asset classes, but also trusted advisors. The demand for second, third, or even fourth opinions on current investment holdings and the direction of the markets and the economy has not been this high since the financial crisis of the fall of 2008. Though it is August and many are vacationing at the beach, it is only natural for clients to be concerned with the slightest trace of negative news that hits the wires and the impact to their portfolio. As a result, incoming client calls to existing and prospective financial advisors have skyrocketed recently.

In such severe times of market turmoil, it is critical to have a robust CRM system such as Microsoft Dynamics CRM 2011 to serve as the cornerstone of a wealth management practice to keep all client data, inquiries, responses, and interaction history centralized and easily accessible for client service teams. While the uptick in client inquiries can be challenging, CRM 2011 makes it easier to locate client data, which improves responsiveness and reduces time spent on searching and administrative tasks. CRM 2011 can even integrate with portfolio management and performance reporting systems. Thus, upon receiving a relatively basic or frequently asked question, the advisory service associate or primary advisor can supplement and enhance his answer with relevant value-added insights on transaction history, market values, rates of return, and recommended investment strategies.

CRM 2011 also provides the ability to generate calling and email campaigns to either one’s whole book of business or to a select, filtered list, such as only the households with the Top Ten largest market values, households who have not had a recent portfolio review in the last 3 or 6 months, households who are deemed to be at risk and who were already in fact known to work with other investment advisors, or households with the largest withdrawals even prior to the market meltdown. This functionality could be extremely handy for advisors to execute a quick market update communication campaign to ease clients’ fears and encourage them to stay the course or tactically reallocate depending on their holdings, risk tolerance levels, financial goals, and investing time-lines. Doing so will demonstrate an advisor’s commitment to acting in the best interests of clients and helping high net worth households fulfill their financial dreams in bullish or bearish markets. Clients will appreciate the proactive rather than reactive follow-up and improved service levels, and thus remain a loyal customer and be less likely to seek other outside opinions on their portfolio.

Firms that lack this convenience of tight integration, fast and flexible data-mining, and efficient and effective client communication campaign formulation and tracking functionality will struggle to retain clients, lose assets under management, and be unable to grow and scale their practice. In such a competitive environment it is crucial for all employees to recognize that lack of communication with heads of household or a tiny delay in response to questions and concerns could cause a valuable client to “play the field” and finally go through with transferring out holdings they deem to be under-performing and actually open up new accounts with a rival advisor.

To learn more about how Customer Effective has tailored CRM 2011 to enable and make it easier for wealth management advisory firms to become the de facto primary advisor, achieve and maintain superior, high-touch service levels, and retain clients, regardless of stomach-churning market volatility, please visit

Post by: Kevin Wessels, Customer Effective

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