Key factors for investor loyalty uncovered

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By: Wise Marketer Staff |

Posted on December 11, 2003

Key factors for investor loyalty uncovered

Financial advisors know from experience that building client loyalty, particularly among affluent and high net-worth clients, is a multi-faceted, lengthy, and complex undertaking. But some aspects of the relationship are more important than others, and investment performance is not always the key, according to Phoenix Marketing International.

Newly published data from Phoenix Marketing revealed the most important attributes that drive affluent consumers' satisfaction levels with their investment advisors. While the performance of investments should never be discounted as a factor in the success of any advisor-client relationship, the Phoenix Affluent Marketing Service research programme has identified five factors that stand out as being most important in building and maintaining loyalty among affluent investors.

Key factors One of the five critical loyalty factors identified by the research is the level of knowledge and quality of advice given by the advisor. "Advisor knowledge and the quality of advice really is the cornerstone of the relationship with the affluent client," explained David Thompson, vice president of the Affluent Practice at Phoenix Marketing International. "The ability of the advisor to take a leadership position with their client - a fundamental component of building client loyalty - starts with their knowledge base and their ability to provide good, sound advice over time."

Another of the key factors is the trustworthiness, honesty, and dependability of the advisor. While this attribute may not have ranked so highly in the past, scandals in the securities industry mean that issues of trust and honesty play a much larger role in the relationship today. "If the advisor has not achieved a good level of trust with an affluent client, all the knowledge in the world will not be sufficient to solidify the loyalty of that client," warns Thompson.

Conclusion The firm's research questionnaire examined more than 20 different factors that were thought to have some influence on satisfaction levels with financial advisors, concluding that although service, relationships, and professionalism are clearly important in building a solid relationship, the elements of knowledge and trustworthiness stand out from the others.

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