The Best Metric of Success? How Often Our Clients Engage with Us

Every company has traditional measurements of success, like profitability and market share. But ultimately, the success of any business enterprise depends on how well you satisfy your customers.

At OppenheimerFunds, our Head of Distribution, John McDonough, leads the effort to help us ensure that we are meeting and anticipating our clients’ needs and expectations. I recently sat down with John to talk about measuring this goal.

1. Can you deliver more than the table stakes for your industry?

As an asset manager, we know our clients expect us to deliver strong investment performance. So the most critical component to our success is delivering consistently solid long-term results. When you bring clients onboard and provide ongoing support to their accounts, you also have to demonstrate that you can offer a world-class service experience. Those are the two table stakes for our industry, and if you fail to meet these expectations of clients you cannot survive in this business.

To truly thrive in asset management or any industry, though, you must surpass clients’ basic expectations. When I was mowing lawns as a kid, my father told me to “always do a little more than your customers expect of you.” While the term “value add” has become a cliché in business, it did so because there is no denying the truth that you must deliver more than what your clients minimally expect of you and what they can get from dozens of your competitors. With each of the additional services you offer, your clients’ level of interest in engaging with you will provide a clear indication of whether you are succeeding.

1. How are you engaging with clients and how many meetings are they asking for?

Our mass-market retail and high-net-worth business channels ultimately serve the end investor so that’s where our fiduciary responsibility lies. Still, we offer advisor-sold investments, so our first client is the financial advisor or wealth manager who serves investors.

In today’s world, we know that you can’t simply push products. We need to demonstrate that we are invested in helping financial intermediaries succeed. Our wholesaling teams are trained as consultants, so that when they call on intermediaries they can deliver recommendations that will help their businesses thrive. We strive to be an advisor to the advisors, on issues that run the gamut from practice management to portfolio analytics.

On the practice management front, our CEO Advisor Institute offers insights on topics like constructing and managing synergistic teams of advisors and having compelling wealth management conversations with clients. The training we offer is not thinly veiled product promotion. Products do not enter the conversation when we provide this type of support.

We also recognize that many of the intermediaries we call on, including advisors affiliated with the national and regional brokerage firms, also get a wealth of support from their home offices. We know that we have to differentiate our services and fill a niche that isn’t already being met by home offices or other asset managers.

We also have a dedicated team that works with the home offices to ensure that we are meeting their needs and delivering the right support to their advisors across the country.

With the diversity and complexity of investment options available today, portfolio construction has become a more sophisticated endeavor for every advisor. Our portfolio analytics team can do a deep dive on the portfolios advisors have built for their clients to assess how well all the investments they’ve selected are working together. By carefully examining the combined underlying holdings of all the various investments, they can help advisors determine if the entire portfolio can achieve the optimal levels of return, diversification and risk management for the client.

The way we measure how well we’re doing with all of these efforts is how many meeting requests we get. We know that the managers of branch offices and independent advisors are inundated with requests from wholesalers at asset managers who want to get before them.

Seeing how often we get requests to meet with both intermediaries and home office representatives lets us know whether we are providing services they want and believe will support their business goals and help them serve their clients more effectively.

I think the importance of keeping focused on your clients’ needs was best expressed by a panelist at a recent conference I attended who told a story about a wholesaler who bragged about how many big-time advisors he had in his smartphone contacts. The person stopped the wholesaler in his tracks and told him: “It doesn’t matter how many advisors you have in your list of contacts, what matters is how many advisors have you in theirs!”

You have to be humble in this business and realize it’s not your priorities that matter. Instead, you have to be focused 100% of the time on offering effective solutions to your clients’ priorities.

1. What insights are being delivered to clients and how often are these materials being consumed?

OppenheimerFunds has a long history of serving mass retail investors and their advisors, and the primary goals for these investors are saving for retirement and financing children’s education. We have always provided insights on how to achieve these goals, and our clients’ engagement with these materials has been high.

In recent years, we have considerably augmented our efforts to support high-net-worth investors and their wealth managers, as well as institutional investors and institutional consultants. For people with substantial wealth, the basic needs of financing retirement and education are already met and they have different concerns, like wealth preservation and legacy planning, supporting causes they believe in, and, for entrepreneurs and business owners, business succession planning.

We know that the financial intermediaries who serve these clients typically deal with the heads of the families, most of whom are generally Baby Boomers or older. To help advisors understand the mindset of the younger generations who are already beginning to inherit family assets, we conducted a research study in partnership with Campden Wealth, an organization with a long history of working with and supporting this market.

Our survey of ultra-high-net-worth Millennials had some surprising discoveries. Because they came of age through two major stock market disruptions―the dot.com collapse of the early 2000s and the financial crisis of 2008-2009―these Millennials are much more financially conservative than their parents and have risk tolerance levels more akin to their grandparents, the members of the Silent Generation who lived through the Great Depression.

Millennials are also very interested in impact investing and want to use a greater portion of their families’ invested assets to make a difference in the world. But they are still savvy investors. They’re not interested in impact investing simply to “feel good.” Instead, they are looking for investments that will have an impact AND still deliver performance results.

These are insights that we think are critical for the advisors and family offices who serve high-net-worth families. The way we measure how successfully we’re sharing these insights is once again by client engagement. The requests for copies of the research findings, visits to our websites, the responses we generate through social media, and the number of times our consultants are invited to speak to intermediaries on this topic all tell us whether the thought leadership we’re offering clients is providing them with unique and useful insights.

We also serve institutional investors and the consultants who work with them. We know that consultant ratings of our strategies tell us whether we are meeting expectations in the institutional market. Here too, the consumption of and feedback on insightful content, like market outlooks and investment thought leadership, tells us if we’re doing more than meeting their baseline expectations.

Today, institutional investors want to know how to find growth in a slow-growth world and where to find income at a time when interest rates are at historical lows. They want help finding the right combination of alternative and non-traditional investments that can deliver sufficient alpha (above-market returns) with effective risk management to help them meet their long-term obligations.

As a firm, our mission is to help our clients address these issues, and how frequently they turn to us for guidance and insight lets us know if we are making a difference and standing out from the crowd. Because we deliver all of these insights through a variety of tailored in-person and digital experiences, we can understand the quality of our impact through direct client feedback, as well as quantitatively.

Hearing from our clients directly will always be essential to our success, but carefully assessing hard data as a measure of our clients’ engagement provides us a more complete story of how successful our efforts truly are.