With so many other challenges facing the wealth management sector, from legacy technology to developing compelling products and services, why are firms turning their attention to complaints?, writes Kate Monserrate, co-founder of advice and wealth management business consultancy Simplify Consulting.
Well, one answer might be found in our recent complaints whitepaper where research revealed that nearly one in five clients of wealth firms leave their provider due to poor complaint procedures.
To add to the pain, 25% of complaints raised are not dealt with to the customer’s satisfaction and 31% claimed that they were not kept up to date throughout their complaints process.
Rather worryingly, 44% also found it was not clear who they had to contact or how to even make their complaint, suggesting that a large proportion of customers continue to face barriers to voicing and expressing dissatisfaction.
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The industry is missing a trick here. By leveraging the insight from complaints in the right way, they can be transformed from a necessary, but low-key, must-have for most firms, into a vital mechanism to understand where, and why things have gone wrong for customers.
The Consumer Duty has given complaints a much-needed lift in terms of visibility and importance for firms at all levels.
While complaints have always provided important metrics, it is now mandated that firms must understand where outcomes have not been right for customers and complaints are the most direct way of identifying that.
The long-term trends also show an industry that still has failed to manage to move the dial significantly on complaints.
Complaints across all FCA regulated firms increased over the last 10 years, despite falling from the PPI and Covid peaks. For wealth management firms, complaints have risen by 24% between 2014 and 2023.
Some resolutions can take time. Yet, does an 8-week timescale to resolution (or otherwise) meet the expectations of 21st Century consumers?
There are, to our minds, 5 key ways to ensure adviser firms complaint processes are optimised:
- Get your complaints strategy right by identifying complaint triggers and manage issues before they become complaints. Monitor and react to how complaints are received, responded to and investigated.
- Root Cause Analysis (RCA) is important in understanding the customer experience and how to influence it in the future. The key is to capture, analyse and utilise RCA to drive better outcomes within the organisation and for the customer.
- The process design needs to apply a holistic approach with an end-to-end complaints process free of waste, with limited ‘wait time’ to drive quick and effective investigations and decisions.
- People & Culture. Make change a core discipline and focus on innovation and solutions that have customer outcomes, ease of processing and prevention of errors at the heart of all actions and decisions. Holistically train employees and have the right tools and support to manage and resolve complaints effectively.
- Prevention not cure. By focusing technology investment on prevention, you’ll understand customer behaviours and intercept trends that lead to dissatisfaction. Then motivate and incentivise pro-active resolution of those root causes.
It seems we still have a way to go in ensuring that wealth management providers can deliver a gold standard service, but getting help now could mean the difference between growing a client base and depleting it.
Kate Monserrate is a director and co-founder of advice sector consultants Simplify Consulting
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