Client Reconnaissance

Here’s a client survey tool that will also provide analysis and help identify clients who at risk of leaving.

What are your clients thinking about you?  Are they satisfied with your services?  Do they feel like they’re getting adequate value for what they’re paying?  Are any of your clients silently unhappy and on the cusp of surprising you by leaving for another advisor—unless you take action immediately?

If these questions have ever occurred to you, you might want to check out Nexa Insights (, a new automated client survey and results analysis tool that debuted at the recent T3 conference in Denton, TX.  The company was founded by people who are very familiar with the industry: Jim Starcev and Mark Calhoun, who founded ETelligent Consulting in 2000 and built it up to the dominant portfolio reporting outsource solution in the financial planning profession before a sale to Schwab Advisor Services back in 2008.  “Back then, we were bigger than Orion, Tamarac and Black Diamond,” says Starcev.  “We worked with Schwab as they rebranded it, and then our lead developer at ETelligent, Chris Manker, came back to us with an idea for a new company.”

Manker had been working for Integrated Healthcare Strategies, which did survey work for hospitals, evaluating how patients rated the quality of their care.  Then he worked as a tech consultant for Mariner Holdings, and a lightbulb went off.  “Fidelity came into their offices and did a presentation,” says Starcev.  They found that 80% of advisory firms would like to survey their clients and find out what they were thinking, but fewer than 23% had actually done so.  Chris started developing a survey tool, and came to us and said, hey, I would love for you guys to help me bring this to market, and develop it, and see what we can do.”

Correlated responses

Nexa is built on Manker’s work at Integrated, which provided a lot of insight into how to phrase questions, and what questions to ask in order to get the most effective information.  “In the surveying world,” says Starcev, “there’s been a lot of research into the most effective questions and how to get the most information from as few questions as possible.”

The questions include things like: Does your financial advisor actively listen to you?  Do you receive good value for the fees that you pay?  There is the usual net promoter question: How likely are you to refer somebody to your financial advisor?

The responses are tied back into the advisory firm’s CRM system, which means they are NOT anonymous.  “There’s a con to that,” Starcev admits.  “It means you’re going to get a slight positive bias in the survey results.  There are some people who, if they have really negative things to say, sometimes will not say them in a non-anonymous survey.”

The positive is that you can tie the responses directly to each client.  As part of the service, Nexa will pull data from the CRM to do analysis on the overall information that has been collected.

“You can correlate the responses with when they became a client, their gender, their work status, their age, their client service level [A, B, C-level services],” says Starcev, “and see that men are responding to you this way, females are responding that way.  Millennials are responding this way, baby boomers that way.  People with A, B and C client service levels are responding differently.  We can cut it by net worth.”

“From a high level, what we want to know is: what is the client thinking?” adds Calhoun.  “We’ll get feedback that clients would not give directly, face-to-face with an advisor.”  He cites the example of a recent luncheon with a financial planning client who confessed that she’s only 30% happy with her current advisor, and was 100% unhappy with the previous one.  She didn’t communicate her unhappiness to the previous one before she left, and isn’t calling her current advisor to discuss his shortcomings either.

“She’s a nice person,” says Calhoun, “and nice people don’t really like to communicate unhappy thoughts or feelings to somebody who is working on their behalf.  We’re giving people like her an opportunity to tell their advisor what they’re thinking without having to sit in front of them and actually say it to their face.”

In nearly every survey conducted so far, the advisory firm was able to identify clients who were probably going to leave if their situations weren’t dealt with.  And so far, in every case, the advisors were able to rescue the client relationship.

“Part of the analytics that we come back with,” says Starcev, “is to break down your entire book of business.  These are secure assets.  These are kind of neutral assets.  And these are at-risk assets.”  The at-risk score comes from low marks on engagement and satisfaction, plus feedback from some of the other responses.  “The algorithms have been pretty accurate so far,” says Starcev.  “We’ve identified at-risk clients, the firms contacted those people, and came back to us to say, yes, they actually WERE at-risk.  We had no idea.  We thought they were very happy with our services, and they clearly were not.

Data interpretation

The surveys include a core set of 16 questions, but most advisory firms will select a smaller subset of those questions.  “We had one firm that only selected seven questions,” says Starcev.  “We actually had to convince them to add a couple more back in.”

Another firm used the full set and added 20 additional customized questions, which the software will allow you to do.  “In their case, they refer out to other professionals,” Starcev explains.  “They wanted to ask questions like: We’ve referred you to an attorney.  What did you think of the attorney?  Our response was: okay, those are interesting questions.  They’re not in our core, or in our larger library of questions, but it was something very specific to them that they wanted to know.”

The analysis, using exports to and from the advisory firm’s CRM, is what makes Nexa Insights somewhat unique.  “Surveying itself is not that difficult,” Starcev admits.  “You can put one together on Survey Money pretty quickly.  Knowing what to ask is a lot harder, and then knowing how to pull that information back in and how to interpret it is harder still.  We’ve talked to firms who said they were thinking about doing a survey and having internal meetings for almost two years, and they still weren’t sure how they wanted to go about it.”

Generally, he adds, if somebody simply selects the core 16 questions, the survey can go out in a couple of hours.  Nexa will work you through the CRM imports and exports, although there are now formal integrations with Salesforce and Redtail, which eliminates even this step.  Orion was the first formally-announced integration partner; Nexa is available with single sign-on through the Orion platform.

  Calhoun says that so far he’s noticed two objections that advisors have to surveying clients.  “One group will tell us: We know our clients really well, so we don’t need to survey them.  The other group,” he says, “will tell us something like: I’m afraid of what my clients will say.  So I don’t want to survey them, because I really don’t want to hear any negative feedback.”

In both cases, interestingly enough, the advisors are pretty much wrong in their assessment.  “We had a small boutique firm, working with about 150 households, who were convinced that they knew their clients, but they went ahead and did the survey anyway,” says Calhoun.  “The survey turned up an unhappy client, and they were able to fix the situation and repair the relationship.”

Another advisor at a much larger firm was worried about how clients would rate his firm’s service.  “He was pleasantly surprised that people did like his firm, and that he was meeting their needs.  Not everybody was perfectly happy,” Calhoun adds.  “There were things to address, but it wasn’t the disaster he was anticipating.”

In the big picture part of the report that Nexa provides, advisors get insights into actions they could be taking to improve the scores.  Starcev adds that a best practice is to send out a group message, after the survey, talking about what the firm plans to change as a result of what was learned from the client feedback.  “When people give feedback,” he says, “they want to see what has changed.”

Of course, this also raises concerns.  One advisor didn’t want to include the question: Do I get good value from my fees?  Why?  Because, he said, he had no plans to change his fees.

“I said, it’s not necessarily about changing your fees,” Starcev says.  “If people come back and say they’re not getting good value, it may be that you’re not communicating the value that you’re providing.  You don’t have to adjust your fees, but you may want to change your communication and really frame the value people are receiving for those fees.”

Cost?  For advisory firms with less than $200 million in assets, the entry-level cost of a survey is $1,400—and that becomes a yearly fee if you do yearly surveys.  Most firms will pay between $3,000 and $5,000, and the largest firms will pay more.

If I were working with Nexa, I think I’d add an open-ended question, that would go into an open text field, asking: what could we be doing, in addition to our current work, that would better meet your needs?  I would venture to guess that most clients won’t respond to that question, but the ones who do will offer insights into how to raise your service level and create a culture of continuous improvement.  And you will see requests specific to each of your clients, so you can address things that they’ve always wanted from you.

But the big picture issue with this story is that most advisory firms have dissatisfied clients who, for one reason or another, have never taken the time to speak up.  Client attrition is low in the financial planning space, but it is not zero—and if your new survey helps you conserve just one $10,000 client relationship, it will have more than paid for itself.