I attended my first Let’s Grow Parmenion event last week; and it was also my first time at the Barbican Conservatory which was a simply stunning venue. My own panel was on Ripping Up The Rulebook, some of my thoughts on which I covered in last week’s Eclipse.
The event more broadly however was looking at the state of play in financial services with a particular focus on service. Martin Jennings made a really good point that a huge amount of perception of service is either unquantifiable or is subjective in its analysis. For example, a company could boast that 99% of its calls are answered within 30 seconds; but if the person answering those calls is unable to correctly handle the query, then it’s not really much of a boast.
Often, for advisers, the only way to truly assess the functionality and service of a provider is to actually use them; and that is rarely an easy thing to do. They don’t want to use clients as guinea pigs in case it goes wrong. They could perhaps use themselves, but it’s not exactly a simple process to invest yourself across several providers and it’s also not a representative sample size.
I mused recently that clients are in the exact same position. Without working with a number of financial advisers (time consuming and impractical) they can’t accurately compare one to another and so their service ratings are very subjective and not relevant to a benchmark. This means there’s little incentive for advisers to keep improving their service and the same can be said in the platform / provider space.
The Parmenion research showed that 88% of firms have had to apologise to at least one client at some stage due to the bad service they have received; meaning the adviser as the scapegoat is an extra layer of complication to this. Added to this is just how complicated and time consuming it can be to change platform for clients; a wholesale change from one to another off the back of average service rarely happens. In fact, the quote I heard was “the financial industry is beset by inertia, change doesn’t happen unless it goes disastrously wrong.”
So, what can we do about it?
For the providers, they would do well to consider how they can both enhance their service and then find objective ways to measure and demonstrate this to advisers, to give them confidence in choosing them. They should also be thinking about how they compensate for poor service and then embed a culture internally to ensure that compensation is never actually needed.
For the industry more broadly, we should be looking at how we can best deal with the issue of poor service as and when it arrives; cost and admin burdens should not be a reason to leave clients in a plan that isn't providing the service they need. Inertia unless there’s disaster should not be the default; knowing change can happen quickly would incentivise providers to improve service and I believe there are ways we can work together collectively as an industry to bring this about. Change and disruption is something that I’m greatly passionate about (so much so it’s one of our values at The Verve Group and my drive to create Dextera™!) so I’ll be continuing to follow developments in this space and will be doing all that we can, as a support service provider, to encourage such evolution.