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Video

Andrew Edwards: To Earn Greater Loyalty, Investment Brokerages Should Think Digital

Bain Partner Andrew Edwards shares how continued improvement in the digital experience can help firms retain customers even when their advisers leave.

  • June 28, 2018

Video

Andrew Edwards: To Earn Greater Loyalty, Investment Brokerages Should Think Digital

Financial advisory firms have built customer loyalty by providing great service from advisers and excellent digital tools. Andrew Edwards, a partner in Bain’s Financial Services practice, discusses how continued improvement in the digital experience can help firms retain customers even when their advisers leave.

Read the Bain Brief: To Earn Greater Loyalty, Investment Brokerages Should Think Digital

Read the transcript below.

ANDREW EDWARDS: We've know for a long time that financial advice firms, be it banks, brokerages or financial planners, grow more quickly when they get more customer loyalty. And we've seen that relationship demonstrated over the years. There are two ways that we've seen firms build that loyalty that's going to generate that growth.

One is with great financial planning and experiences provided by financial advisers. And that's the traditional way of doing it. Those advisers work with their clients to build financial plans, save more, save smarter, invest more heavily and generate better personal returns for themselves. More recently one of the things we've seen is that we've seen a lot of firms enhance that with a digital experience, so, providing a great digital financial planning experience, where customers are using digital tools to build a financial plan, they're receiving digital reporting, and they're having a digital account onboarding experience rather than a cumbersome paperwork one.

Those experiences also build more loyalty. And as we know, loyalty drives growth. So firms that are able to provide both those things, great financial advice provided by financial advisers and great digital experiences to enhance that, are getting even better loyalty. And they are able to grow even more quickly.

That growth comes in the form of referrals. It comes in the form of asset accumulation. And it comes in the form of customer loyalty and stickiness. One of the special things that we've seen is that when we look at the data and we see that customers who have a lot of digital experiences, when their adviser leaves the firm, what they tell us is, I'm actually more likely to stay with the firm than with the adviser.

And so a firm that invests to build those great digital experiences not only benefits by growing, but also benefits by retaining its customers in the event that they lose an adviser. Working with our clients to develop the digital tools, to add to the existing advice experience, including great financial planning, great reporting and great digital onboarding, in order to enhance the overall loyalty of the customer, enhance the overall customer experience, enhance adviser productivity and make us more likely to retain the assets of the customer in the event that the adviser leaves the firm.

Read the Bain Brief

To Earn Greater Loyalty, Investment Brokerages Should Think Digital

Customers want an excellent digital experience, not just sound advice.

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