2022 was a tough year for most wealth management firms. And as much as they may not have heard much from their clients [see our article about the Ostrich Effect], clients were hurting seeing their portfolio down 15-20% on average.
One of the key ways our firm starts its branding, messaging and marketing strategy with our clients is to actually get on the phone with 5-10 of the end clients, asking them about their valuable experience with this wealth management firm. This process requires delicacy and extreme care, as we want to get out of the client what they value most about the experience and the firm. It also does require the survey be done by an outside party, as clients will feel uncomfortable sharing their true insight with the actual CEO or internal employee of the firm. My own background as a wealth manager and investment professor allows me the credibility to speak with the end investor, putting them at ease to speak comfortably with me.
Through these live client and investor surveys, we crystalize exactly what sets this firm apart from the rest, and that gives us the roadmap for better articulating the firm message, addressing key challenges, and embracing opportunities!
But you may not have the benefit of an outside CMO [learn about our Outsourced CMO program] in order to go through this process. Furthermore, with over 1,000 accounts, you may want more than 5-10 client surveys to get a “lay of the land” to understand the overall feel within your client base.
It is during times like this that we highly recommend your firm take a Net Promoter Score survey from its client base.
Not only can the results of the survey help you understand what your clients value and want to voice, but it can also help you promote the score to your prospective clients.
In the bottom of this article, we have an actual NPS Survey you can purchase to send to your clients. But first, let’s see how to utilize it.
Introduction to NPS
You’ve probably heard of the Net Promoter System (NPS) before. And if you haven’t, then you’ve likely at least answered an NPS survey - One little question asking you to rate how likely you are to recommend a company or service to a friend. That’s it. But here’s where it gets interesting. From the responses to that question, a business can start to determine the percentage of their clients who are very happy with them, and what opportunities are present for improvement.
How is NPS measured?
Clients are asked to rate on a scale of 0 to 10 how likely they are to recommend your firm or services to a friend. Once a statistically significant number of responses are recorded, they’re categorized by score. Scores from 0 to 6 are Detractors. These clients are unsatisfied and unlikely to recommend your business. Scores in the 7 to 8 range are Passive - likely satisfied, but not excited by their experience. Scores in the 9 to 10 range are known as your Promoters. These clients are happy with their experience and likely to recommend you to a friend or family member.
In order to calculate your actual score, simply eliminate the passives, then subtract the percentage of detractors from the percentage of promoters. For example, if you have 5% detractors, 30% passives, and 75% promoters, your score would be 75 – 5, or an NPS of 70.
What are some sample NPS questions you can ask for your wealth management or CPA practice?
Below are just some sample questions that can be asked. We have a sample NPS on this link.
On a scale of 0 to 10, how likely are you to recommend our firm to your friends or colleagues?
On a scale of 0 to 10, how likely are you to recommend our solutions (financial planning, money management, tax planning, etc) to your friends or colleagues?
Rate your most recent experience with your advisor at our firm
Which features and services do you value the most at our firm?
What else can we be adding to our services for your benefit?
Take our Sample NPS Test Here
Best way to structure your NPS survey:
In order for your NPS survey to be most effective, there are a few best practices we highly recommend:
Make it anonymous
Allow your clients the chance and opportunity to be as frank as possible. Otherwise, you won’t hear their true feelings around your firm and areas for improvement. Truth hurts, but losing clients hurts more!
Make it short
People don’t want homework and your clients are not part of your marketing department. Don’t make it a burden for your clients to take, and don’t subject them to a long questionnaire of dozens of questions. The shorter and briefer the survey, the more people will submit.
Give the reviewer a chance to also write their words
Don’t rely solely on a number from 1-10 to give you direction. The most valuable insight comes from the actual description they share for each question. We have those questions within the sample survey we’ve included for you.
What’s a “good” NPS score?
Believe it or not, a score of 0 or above is considered to be a “good” NPS score. A zero means you have at least the same number of promoters as you do detractors, so you’re doing something right.
If you score above 50, you have an excellent NPS score and are likely serving many satisfied clients. A score above 80 is absolutely outstanding. If you manage to score that high, you’re swimming in happy clients who are enthusiastic about your services and are constantly sending you new referrals.
So what can you realistically expect from your NPS score?
In the financial industry, the average score is 44. So if your business scores 45 or higher, you know you’re doing an above-average job of building relationships with clients who are very satisfied with your service. But there’s always room for improvement. The top NPS scorers in the financial industry are in the 70 to 80 range.
Of course, as a highly competitive person, I doubt you’ll be happy with that score. Let’s aim for 90 or higher.
Why should I care about NPS?
At its base, NPS can be described as a measure of client loyalty. Your most loyal clients are the ones who are very happy with your services and likely to recommend you to family and friends. And make no mistake, referral marketing is one of the most powerful ways to bring new clients into your business.
NPS can also help you predict the amount of client churn you might face. Those who are unhappy or passive don’t feel much loyalty and are more likely to patronize a competitor.
How can I increase my NPS Score?
Think of a low rating from a client as an opportunity to learn and improve. Many NPS surveys provide a field for dissatisfied clients to give more details about their experience. While it can be painful to get a low NPS rating, understanding how you can prevent that experience in the future can be extremely valuable.
The most important thing you can do to increase your score is to not just think of the results as feedback. Consider it as actionable data. For example, maybe you have several clients who give a low rating and leave feedback about not understanding why they were charged the way they were. Now you know that you should take action in setting up clarity around your fee structure or even explore new fee structures that clients may prefer. The changes result in fewer detractors and more promoters.
Looking for ways to enhance the client experience? Contact us for customer service training, client experience mapping and more to modernize the look and feel of your practice!
This example shows how you should be thinking about your NPS score as an improvement loop. Every time you take action, you should see it reflected in your scores.
Now you start to understand how a seemingly simple question like, “Would you recommend us to a friend?” can empower your firm to grow, improve per-client ROI, and result in more referrals. If you’re not currently measuring your NPS, it’s a great time to start. It’s a small ask from your clients, but it can yield massive benefits for your firm.
This blog post explores the importance of improving referral quality for financial advisors. While receiving referrals is typically viewed positively, advisors often encounter referrals that don't align with their target client profile or fail to convert into actual clients. The post highlights three key factors contributing to this issue. Firstly, the lack of clarity on the advisor's niche market, emphasizing the need for a specific and well-defined ideal client. Secondly, referrals driven by niceness rather than suitability, necessitating client education on making appropriate referrals. Lastly, the importance of strong sales coaching and consultative skills to effectively convert referrals into clients. Addressing these factors can optimize referral processes, attract ideal clients, and foster business growth.