View more on these topics

Mourning service

In common with most financial journalists,I get frequent correspondence from consumers who need information or to let off steam about a recent experience. My e-postbag contains more money problems than an FPC exam.

They range from easily remedied glitches to serious examples of bad business behaviour.

Although journalists by their very nature are cynical beasts, I am relatively optimistic about the financial servi-ces industry&#39s efforts to try to get things right more often than not. But what does strike me as sad is that more and more of the investors who contact me are not so angry about the glitch itself as the way it has been handled by their adviser or investment company.

Repeated studies tell us that customers who receive good service will stimulate new business by telling up to 12 other people about it, while those treated badly will tell up to 20 potential customers. It is also reckoned that 80 per cent of those who feel their difficulties and complaints are handled fairly will stay loyal.

I think this is what is called a “no-brainer”. If you have to think deeply about it, you have missed the point.

Walsall-based Regency Financial Management partner Julie Walker believes her attention to customer service is the key to strong relationships which has led to whole families and groups of friends recommending her company.

Walker estimates around half her business comes from these recommendations. “I feel that as clients open up and provide such personal information about themselves, it is equally important for me to share some personal details about my life with them. This in turn builds trust and friendship,” she says. Just think of the money she is saving on advertising.

Bristol and London-based IFA Holden Meehan also takes this issue seriously. The firm sends out questionnaires to clients once a transaction is completed. Then – and here is the tough bit – it actually pays attention to the feedback and follows it through, making improvements wherever it can. A key finding is that its clients like regular contact once the business is processed, even if there is nothing to tell them.

But no matter how beneficial customer care is, some firms still prefer to avoid the issue or hope they can get away with a token effort.

Perhaps this is why the whole area is coming under greater scrutiny from the FSA. Its new Treating Customers Fairly team is gathering information from consumers, the industry and the media about customer service standards in the financial services sector.

Its initial findings suggest firms put much more effort into attracting new customers than looking after existing ones.

A tendency towards short-termism has also been identified by IFA Promotion. Chief executive David Elms believes those continuing to focus on cherry-picking as opposed to lifetime relationship marketing are going to find it increasingly difficult to survive. He says: “IFAs have to look at the margins they are going to make from knowing a client over many years rather than through a single transaction or potentially watch their business dwindle in a 1 per cent world.”

Add to this the increasingly high expectations of customers, who are becoming more empowered through research, and the pressure to add more value than your competitors is greater than ever.

Elms sees great potential in the internet as a cost-effective means for communicating with clients. This makes sense as investors are flocking to the web as an incomparable research tool. But dotcoms have room for improvement on the customer care front and many do not even have a telephone number on their site.

Research by management and IT consultancy Cap Gemini Ernst & Young claims internet banking is failing consumers, with 59 per cent of email not answered within eight hours. The survey also found that financial services companies are the worst culprits when it comes to sending out unwanted mail. Many consumers feel banks and credit card companies are jeopardising customer relationships in the rush to gain more business and increase profits.

Mick McAteer of the Consumers&#39 Association sees stakeholder pensions as a good catalyst for improvement. He says: “There will be less to differentiate the products in terms of price, etc, and people cannot really draw any conclusions about future investment performance from past performance. I think companies will have to find a way of distinguishing their brand or building and maintaining customer relationships. Stepping up the quality of service could be the way they try to do this.”

The perfect balance between commercial and consumer interest was captured by John Lewis Partnership founder Spedan Lewis. He said: “If we rely upon our value alone, we shall obtain considerable success. If to our value we add a constant and careful cultivation of all the other arts of building up and maintaining goodwill, we shall be vastly more formidable than our competitors and do a very great deal better.”

The focus of this message is achieving higher profits and recognising the need to differentiate your business from the rest of the market through putting customers at the centre of everything you do.

Good customer care is essential to survive but exceptional customer care will set you apart from your competitors.


Scottish Mutual cuts terminal bonuses

Scottish Mutual has cut terminal bonuses, but reversionary are remaining at the same levels. Terminal bonuses on with profits products are down to 6 per cent from 6.75 last year and 5.25 per cent, down from 6 per cent on unitised life and pension business. Reversionary bonuses on life products stay at 2 per cent […]

FSA bans commission to IFAs with tree restriction

The FSA is forcing life offices to block IFA commission on stakeholder if their call centre staff take clients through decision trees, potentially leaving IFAs unpaid for hours of work. The move means even if a commission-based IFA has advised an employer, performed a worksite presentation, distributed marketing material and convinced dozens to take the […]

Millfield bids for £18m float in aim for 700 RIs

The Millfield Group is floating on Aim this week in a bid to raise £18.5m to fund an ambitious expansion programme. The IFA, which was set up in 1998, wants to increase its number of advisers from 100 to 700 in the next three years. It will also look to boost head office personnel and […]

Survey shows young people want financial services

Few young people currently have savings, insurance and pensions, but most aspire to have them, according to a survey of YMCA residents by the New Policy Institute .The research shows 90 per cent think they need a pension but only 10 per cent have actually started one. Of those surveyed, 70 per cent thought it […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm