The Rules of Engagement draws on data collected through Advisor Impact’s Economics of Loyalty research, launched in 2008 and now being conducted annually in the US, Canada and the United Kingdom. The report incorporates input gathered from more than 1,200 investors across the United States, all of whom work with a financial advisor, contribute to the financial decision-making in their households and meet specific asset criteria.
CLIENT ENGAGEMENT INDEX
“Our new Client Engagement Index is a simple but powerful reflection of the health of an advisory business and of the industry,” said Advisor Impact CEO, Julie Littlechild . “As compared to other measures of success, it is the only one that captures the quality of the client experience and actual referral activity in a single number.”
The Client Engagement Index is being published in the context of several other metrics, referred to as the “Essential 13”, a set of data points that will be tracked on an ongoing basis to assess: consumer sentiment, the role of advice, key performance indicators for advisors, and the impact of engagement with respect to value and trust.
“We believe that client engagement is the most critical metric for advisors and for the industry because it reflects both the client experience and the potential for growth. Engaged clients are the most satisfied and loyal, they perceive higher value in the role of advice and they will drive almost all referral growth for advisors,” Littlechild said.
According to the current Advisor Impact study, Client Engagement – which is a composite score reflecting individual levels of satisfaction, loyalty and referral activity – has increased four percent since 2010, which is when the last study was completed.
“It is gratifying to see the Client Engagement composite score move from twenty-four percent to twenty-eight percent over the past two years,” Littlechild said. “This tells us advisors are working harder to build relationships and shore up the erosion of trust we saw as a result of the market scandals and banking crisis in 2008/09,” Littlechild said.
KEY ELEMENTS OF SUCCESS
The new study reveals the following key indicators of success for advisors:
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