Monday 12 August 2019

Woodford: A question for financial advisers and wealth managers...

This screenshot is taken from an article in Saturday's Times entitled 'The worst-performing funds, from St James’s Place to Woodford Equity Income'. It highlights ten funds with a total of funds under management in excess of £20 billion. There is no doubt whatsoever that some investors in these funds will currently be looking for a new home for their capital. Our question for the investment management industry is simple...

'Does it think it has a duty to help potential investors when they are looking for a safe home for their capital?'

Let us explain

You will have written to your clients explaining just how your firm is safeguarding their capital and addressing their objectives without involving them in the kind of risks we have seen bring about Woodford's downfall, just as you would have, given a similar crisis of confidence in, say, 2009, 0r 1999, or 1989?

But here we are in 2019. And there is a mechanism out there that was not available in 2009: Google reviews. But very few in the financial world have worked out just what a powerful message positive reviews are able to convey to existing and potential clients alike.

The advantages of Google reviews - from an investors point-of-view

Google reviews can be posted by anyone at any time; this gives them credibility. They are also highly visible - appearing front and centre in any given Google search.

Well managed, Google reviews provide potential investors with reliable first-hand corroborations of the business's own marketing. Here's an example - on the business's own website (you will be familiar with this kind of thing):

But reinforced by over forty opinions on Google (often before the potential client even arrives on the company website):

The advantages, from the fund manager's point-of-view

A reassured potential client/investor is much more likely to become a real-live client/investor. And these reviews (and the remaining 40-odd) are nothing if not reassuring.

So why do most financial advisers and wealth managers look like this on Google?

Or - in the overwhelming majority of cases - this:

How about the largest UK wealth manager?

We didn't have to look far to find this example. The first ten St James's Place offices in map/mobile search return the following:

Perhaps it is because they are aware that there are disadvantages inherent in engaging with reviews. Awareness of these, we suspect, has gone a long way towards the current state of inaction. We spoke to two businesses, one with a significant amount of reviews and one with none, and the answer became clear.

Human nature

There was either an extreme, albeit rare, case of optimism: 'We don't need reviews, all our clients come to us through word of mouth' or, uch more common, pessimism 'We would never consider inviting our clients to write a publicly visible review, you never know what they might say.'

The first one is difficult to answer, except to say that even those introduced by word-of-mouth have been known to consult the web, even if only to find contact details (and they will see reviews when they do).

The second was answered by the adviser with lots of reviews: 'We were extremely wary, so we dipped our toes into the water very gently; soon we realised that we should have faith in ourselves and our clients. We work hard to give them the best advice and service and they have recognised that in their reviews - both in terms of the scores and content.'

They did, however, go on to say that they were highly selective when it came to those clients they invited to write reviews. This is important. The CMA regulations clearly state that a business that proactively invites reviews must enable all its customers to do so. When we mentioned this to the businesses with reviews they were at first surprised, then concerned. The overwhelming reaction was 'so how can we possibly prevent unfair (negative) reviews being posted?'  Read on.


Some of you will have been wondering 'if we do become proactive with reviews, where does HelpHound fit in?' HelpHound adds value in many ways, but by far and away the most important, in the context of Google reviews, is moderation.

When HelpHound clients invite customers to write reviews those reviews all come back via a HelpHound moderator. Our moderators read every review, post those that contain no contentious issues straight to the business's website (where they are available for all to see), but should they come across any that contain factual inaccuracies and/or statements likely to mislead anyone reading them they revert to the reviewer for 'clarification'. This invariably results in an accurate - and helpful to all parties - review.


All  Businesses - and that includes wealth managers and financial advisers - have everything to gain from adopting a proactive stance where Google reviews are concerned, with these caveats:

  • that they do so in compliance with the law - the CMA regulations
  • that they employ a moderated mechanism

Further reading...

No comments:

Post a Comment

HelpHound is all about feedback, so please feel free to comment here...