Financial advisors need to create a “Starbucks” type client experience to drive growth, says Fox Financial Planning Network.

The new white paper, The Rise of Automated Workflows in Financial Advisory Practices: Why Developing a "Starbucks" Client Experience is the Key to Sustainability, can be downloaded here.

It focuses on the challenge of systemisation facing the independent wealth industry, as firms have been built from the “bottom up” with a start-up mentality.

"Many firms have built their businesses 'upside down' in that they have not put in place a foundation of well-developed systems and operating procedures,” said Deborah Fox, chief executive and founder of FFPN.

“As a result, advisors and their staff spend the majority of their day working reactively rather than proactively which leads to their clients experiencing an inconsistent and inefficient service experience," she said.

"The solution to these issues is to adopt systematised workflows for providing a high-level of service, similar to how industry leaders, such as Starbucks Coffee Company has done,” says the report.

Indeed, as Nick Georgis, vice president of Schwab Advisor Services, told sister publication Family Wealth Report recently, the growth of the registered investment advisor industry in the US since the late 1980s has been “incredible” and the last decade “has been unbelievable”. However, this growth means “the complexities are just more challenging and they need more help to continue to grow and meet their goals,” he said.

Growing awareness

As an example of ways firms are dealing with this, BKD Wealth Advisors, a US Midwestern firm, brought in Ritz Carlton to help develop a client service model, its president Jack Thurman told this publication in an interview.

“You can have the best financial planners…the best portfolio managers out there but in all truthfulness the greatest need within this marketplace to compete with the major brokerage firms is a client service model,” said Thurman.

There are visible efforts in this area in the industry: Schwab Advisor Services has been running a programme on client profitability that focuses on standardisation and creating service models. Critics of this might argue that wealth management is all about individual relationships, but “you can build standardisation with customisation,” said Thurman.