Instilling Client Loyalty By Exceeding Expectations

Instilling Client Loyalty By Exceeding Expectations

Clients are an investment management firm’s most valuable asset in building a viable, sustainable business. Cultivating strong, long-term relationships that stand the test of time and that weather varying market environments and organizational changes requires a concerted effort. Strong performance is not enough. Exceeding client expectations beyond your portfolio mandate is the best way to instill loyalty and preserve relationships through rough patches.

Described below are ways managers can exceed client expectations and strengthen relationships.

Foster A Client-Centric Culture

First and foremost is a client-centric culture. Firms that value the importance of their clients, and continually convey appreciation and respect through meaningful action generally have client retention rates high above industry averages. They motivate their teams at all levels to excel in communications, service, teamwork and delivering value to clients. Many institutional clients are resource and time-constrained. Are there special projects you can offer your clients to help them make better investment decisions (e.g., access to the sector analyst who covers their company’s industry, risk analytics), helpful resources you can refer (e.g., for cyber security, specialty consultants, introductions to peers), intellectual capital you can provide to help enlighten them? By being an ally, taking initiative and being a go-to resource, an asset manager can become a client’s valued partner to a depth that supersedes performance.

Jennison Associates is an excellent example of an asset manager who has always put clients first. The firm’s founder and former CEO, John Hobbs, was adamant about communicating the appropriate time to invest in the firm’s large cap growth strategy – at the bottom of the growth cycle, never at a performance peak, and making sure that clients understood the likely annual volatility of returns. When Jennison introduced color to their materials in the 1980s, it was incorporated into the client materials first, the marketing communications second. When they launched their first website in the early 2000s, they launched the secured client portal first, and their public site second. The result, a significant number of clients who have retained the firm for 10 years, 15 years, 20 years and even 25 years.

Communicate, Communicate, Communicate!

Regular communication and meaningful two-way dialogue are essential to strong relationships. The more you know about your clients’ objectives, interests, concerns, priorities and anticipated changes, the greater value you can deliver. Set realistic expectations and make every effort to exceed them. Periodically, review the objectives of the investment mandate to confirm that the variables (e.g., role in total investment portfolio, return objective and benchmark, risk parameters) remain appropriate, and reaffirm the reasons you were hired. Make every contact relevant, valuable, and informative. Never call or ask for a meeting just to give a performance update. Share informative intellectual capital, industry studies, articles of interest (both business and personal). For clients to take your calls and meet with you (outside of meetings they request), you must earn their trust and add value. A long-term commitment, time and patience are all required. Keep track of your client contacts and activities (written, calls, meetings, entertainment, special projects) with a good CRM system. A good system will help ensure that you stay in consistent contact, and can make client communications seamless across a firm rather than being dependent on one individual.


Do not wait for your clients to call you, particularly during periods when your strategy is out of favor or when performance falls short of objectives. Know and show (versus just tell) why you are lagging your benchmark and/or peers. Provide analytics to demonstrate adherence to your disciplines, and convey the reasons clients can continue to have confidence in your firm. Make it easy for your clients to repeat concisely to their boards the reasons to keep your firm. Always be the first to communicate news about significant developments at your firm.

Be Responsive

Respond to client calls and requests immediately. Work as a team to ensure a qualified individual gets back to the client when the primary contact is unavailable. Follow through with any promised action. If a request is outside your area of expertise, reach out to your industry contacts for qualified experts you can refer. If you make a mistake, admit it. Never become defensive, and address any issues as quickly and completely as possible. When we conducted client satisfaction surveys in the 1980s and asked which managers stood out in terms of client service, the nearly unanimous answer was, Brinson Associates. Brinson was cited for their responsive culture (“can-do attitude” from the receptionist to the sales people to the portfolio managers), and for being the go-to resource for information on global markets. Today, firms like BlackStone and PAAMCO are recognized as leaders in developing customized solutions for clients.

Ask for Feedback

Periodically, ask your clients how you are doing. What is working well? What do they find of most value? What do they find of least value? What could be improved? How can you be a better partner to them? Anything you are not providing that they would like? With what other asset manager(s) do they have an exceptional relationship and why? The best time for ask for feedback is when you are underperforming. You are likely to get more honest and detailed feedback. You can also engage a knowledgeable third party to conduct a client survey. It is important to act on the feedback and show your clients that you listen and genuinely care.

Benefits of Exceeding Client Expectations

Putting your clients first and building strong, long-term relationships can buy you time when your performance is lagging. Or at minimum, even if assets are cut and/or the consultant is recommending termination, you have a greater chance to keep a relationship. In addition, your opportunities to cross-sell other strategies are increased. The likelihood of referrals and a positive “whisper campaign” is greater. Best of all, you can develop wonderful friendships.

Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Christine Røstvold, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Christine was a founding board member of PAICR (Professional Association for Investment Communications Resources), and served on the Advisory Board for more than a decade.


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