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Ed Meek
CEO/Investment Advisor

Edge Portfolio Management

City:Winfield

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

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Translating Advisor Satisfaction to Advisor Loyalty

Satisfaction among investors does not always lead to loyalty, but highly satisfied investors are more likely to stick with his or her advisor. 

| BY Kent McDill

For corporate America, there is nothing better than a satisfied customer, and satisfaction often leads to product loyalty.

But does that same thinking apply to the world of financial advisors? Do satisfied clients necessary translate into loyal clients?

It is a supposition that runs through the Spectrem’s Millionaire Corner study How Financial Advisors Can Increase Client Satisfaction and Loyalty. Simply put, client satisfaction does not necessarily mean the client will follow the investor wherever he goes.

Client satisfaction for financial advisors is 73 percent overall, according to the study. It reaches to 80 percent among the wealthiest clients, and ranges up among older clients, and those who are most dependent upon their advisor for financial decisions.

But client satisfaction is not directly translated into client loyalty, as shown by the questions asked in the Millionaire Corner study to determine how tight a client is with his or her advisor.

When asked whether they would move to a new firm if their advisor changed firms, under 60 percent of investors said they would. Those that would move with the advisor said the relationship with the advisor is more important than the relationship with the firm for which he works.

However, among investors who said they were either satisfied or very satisfied with their advisor, 61 percent from all wealth segments said they would move with their advisor, an indication that there is some correlation between satisfaction and loyalty.

RELATED: See Millionaire Corner's Best Financial Advisors Search Page

Based on wealth segmentation, 60 percent of Ultra High Net Worth investors (with a net worth between $5 million and $25 million) said they would move with the advisor, while 53 percent of Millionaire investors (with a net worth between $1 million and $5 million) would move, and 50 percent of Mass Affluent investors (with a net worth between $100,000 and $1 million) would stay with the advisor.

A sign of loyalty would be the willingness to recommend an advisor to others. However, according to the Client Satisfaction and Loyalty study, only 32 percent of investors said they were “extremely likely’’ to recommend their advisor to someone they know, and another 29 percent said they were “likely’’ to do so. That leaves 39 percent who either were not sure they would recommend their advisor or relatively certain they would not.

From Spectrem’s 2013 Millionaire Corner study Relationships with Advisors, the older investors were the most loyal, but not to a great extent. Only 54 percent of Millionaire investors 65 and older said they would move with their advisor to another firm, while 47 percent of Millionaire investors ages 45 to 54 said they would move.

Asked why they would stay with the firm rather than move with their advisor, two-thirds said the brand name of the company the advisor works for is more important than the relationship with the advisor.

RELATED: The Relationship Between Wealth and Advisor Usage

History shows us that loyalty in an advisor has been affected by the recent economic downturn. Before the recent recession, loyalty in an advisor was at 60 percent among Millionaire investors, significantly higher than the current 54 percent.

More so than with satisfaction, loyalty is earned. It is earned through communication, constant contact and understanding an investors needs and desires. But advisors need also to be indispensable, being able to address all of an investor’s financial issues rather than requiring an investor to find another advisor with expertise in a particular area.

This problem can be avoided by having a network of fellow advisors who will help maintain customer loyalty and keep the investor from even wandering outside of the advisor’s firm.

One-third of all Millionaires use more than one advisor for their financial needs. To which advisor is that investor going to show loyalty? The answer is probably the one that performs the most significant work.

Seventy-one percent of Millionaires say they prefer to work with a diverse financial firm rather than with a specialty firm. That is the “one-stop shopping” attitude that can foster loyalty when advisors can help in a multitude of areas.

Only 39 percent of Millionaire investors have been with their primary investor 10 years or more, an indication that changing advisors is something that is done more often than not.

It does not take a change of firm to prompt investors to change their financial advisor, but it is not financial losses that is most often cited as a reason to change advisors. From the Relationships with Advisors study, more than 50 percent of investors said communication issues would be one of the reasons they would change their advisor. Chief among those communication issues was “not returning phone calls in a timely manner’’ with 63 percent of Millionaires selecting that choice.

 



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.

 


 

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