Wednesday 27 November 2019

How to choose a wealth manager

This was the title of the lead article in this week's Sunday Times Raconteur section:

In 2020 you might expect some reference to researching using the net. But there is none. So we will pick up where this article left off. 

The article references 'the damaging closure of high-profile Woodford Investment Management' so we will just add another three 'high-profile' names that have featured in the press recently to start a list of our own: St James's Place, Hargreaves Lansdown and Lindsell Train; we will then go on to examine the online presences of all the firms quoted in that article, after all, won't every investor looking for a new home for their portfolio be searching online as a first step - even if only to find contact details?

And right next to those contact details, in every single search? 

That's right, the firm's Google score - in lights - and a link to their own clients' opinions of them. If you were searching for someone to manage your life savings, even if you have had the firm strongly recommended by a friend or colleague, or you know an existing client who thinks they are the bee's knees, wouldn't you want to read what their other clients have to say? We would. So let's take a look, shall we?


St James's Place (head office)

St James's Place (a typical office):

Hargreaves Lansdown

Linsell Train

Chase de Vere

Mattioli Woods

Brooks Macdonald

Quilter Cheviot

Barnett Waddingham

Brewin Dolphin

Last line of the article? 'It pays to do your homework'. All we can say is 'good luck' researching these businesses online, you'll get plenty on past performance (and we know what everyone, including the regulators, says about that) but next to nothing from their hundreds of thousands of existing clients about service levels. Even those that score well - see Brewin Dolphin above, where none of their three reviews appear to have been written by a 'real' client and Barnet Waddingham with a score of 4.9 from seven reviews, ditto (five being worthless ratings, four of which have been written by points-seeking local guides) have made no effort to harness the power of online reviews for the benefit of potential clients.

The article contained this survey:

We're going out on a limb here, but surely those who value 'personal attention' and 'quality and reputation' might also place a high value on a business that went to the trouble to invite and display customer opinions like this:

And this...

And this...

Surely the most cynical investment manager is going to acknowledge that at least some of their potential clients might be reassured by seeing that in excess of 100 of their existing clients were prepared to put 'pen to paper' to voice their approval of their service?

So why don't they?

We did the obvious thing. We asked some. They responded candidly (having been reassured their responses would be published anonymously). Here they are...

  • "We expect the responses - and ratings - to correlate with clients' subjective experience of the performance of their portfolios."
  • "We expect that our unhappy investors will be much more likely to post - therefore unfairly skewing our image."
  • "Many of our clients are simply not financially savvy enough to make a reasoned judgment."
  • "Our clients will object to being asked to publicly express an opinion of our services."
And, more than once...
  • "None of our competitors have engaged with Google reviews."
We mined further down. Why not? The answer, when pressed, was invariably fear. Fear of the unknown, fear of losing control. So here's our answer to that 'fear'.

Fear that clients will focus on performance

Performance is one - important - aspect of any investment management service. But remember that clients do not need the business's permission to post a review on Google. One surefire way to ensure a negative online impression over the long term is to leave the field clear for unhappy clients. Remember that the business can always respond to the review, and use that response to educate their potential clients as well as address the contents of the individual review. 

Fear that only those with an axe to grind will post reviews

This has been proven to be a 'false fear'; there is no evidence at all, across a range of high-value services where the business has proactively engaged. And that is the key: ignore consumers and the most disgruntle will post reviews, engage and happy loyal clients will way outnumber them.

Fear that clients don't understand financial services well enough to post an accurate review

This is where a service like HelpHound comes in. Our clients invariably invite their clients to write their review to them in the first place, this gives HelpHound the opportunity to moderate the review before publication. What is moderation? It is the act of checking a review for factual inaccuracies before it is published. Reviewers welcome it as much as our client businesses - after all, most reasonable people don't actively want to post an inaccurate or misleading review, they actually want to help their fellows make the right decision.

Fear that clients will resent being asked to write a publicly visible review

If anyone thinks that financial services are so sensitive as to be exempt from reviews then we would ask them to consider this client of ours, a Harley Street feminine health and wellbeing clinic.

There are perfectly reasonable grounds for this objection, after all, finance is a private matter. Our answer, based on extensive experience with similarly sensitive businesses, is that a - perhaps surprising - number of people are prepared, willing even, to share their experience for the benefit of their fellows. Remember that no one is forced to write a review, all that it takes is careful wording of the invitation (such experience we have in spades) making it quite clear to the recipient that their review is designed to help others and is entirely voluntary. 

No other financial services business has engaged with reviews

We hope we have made a strong case for reviews in the context of investment management and financial services. We are confident that the first financial services businesses that engage will see immediate benefits, in much the same way that estate agents (hardly the most popular businesses!) have done - here is the monthly report Google sends every business (we recommend you seek out whoever in your business receives it, the data it contains is invaluable):

Aside from your business's Google score which anyone can easily find by simply googling your business, it contains vital information on...
  • how many people found your business in Google searches in the previous month (2,653 in this client's case)
  • how many calls you received directly through Google (73)
  • how many visits to your website came as a direct result of finding you in a Google search (90)
...and, perhaps most important of all, any uplift in these numbers (important because the uplift, in this case, was as a direct result of joining HelpHound).

Further reading...
  • Thousands could lose their life savings - why reviews matter (this article was written well before the Woodford storm broke, but would have been just as relevant in that context)
  • Estate agents were - understandably - wary about adopting a proactive stance with reviews; see what five of them say here
  • Unfair, fake, misleading or just plain inaccurate reviews do no-one any good, and they can seriously impact a business. Here's the happy ending for a case involving a client of ours.

Monday 25 November 2019

Inviting selected customers to write reviews of your business? - it's illegal

This article is aimed at two distinct audiences: clients who find they are competing with businesses that are flouting the CMA regulations and those businesses themselves.

The regulations

Most businesses (and all regular readers of this blog) are aware by now that two actions are illegal...
  • selectively inviting 'happy' customers to write reviews - known as cherry-picking
  • Using a filtering mechanism to identify such customers - known as gating
There's more on the detail of these regulations in this article. But, as with all laws, they are ineffective if enforcement is lacking. The CMA has much besides reviews on its plate, so, as is common with government bodies of this ilk (HMRC anyone?) they rely heavily on whistleblowers. Here is the kind of letter a whistleblower might easily, and with complete justification, write...

At this point, the CMA would be bound to open an investigation. The nature of this investigation will depend on the CMA's assessment of the severity of the infringement of its regulations. This assessment, in turn, will depend on the potential harm the infringement may do to consumers. Businesses playing fast-and-loose with reviews self evidently seek to influence consumers to take an action - with financial consequences - that they might not otherwise have taken had the business been in compliance with the regulations.

The CMA has teeth

In summary...

If your business is doing any of the following...

  • inviting selected customers to post reviews to Google
  • using any kind of mechanism to establish what kind of Google review a customer might write - a feedback system, another review site, a questionnaire, simple 'shop-floor' feedback from staff is breaking the law (the business and its directors personally). You should stop any such activity immediately and seek advice on compliant review management.

Further reading...

Sunday 24 November 2019

Google now invites visitors to your website to write a review

Google has expanded its outreach to your customers a step further. Now, when someone visits your website, they will get an invitation from Google like this:

The implications for businesses:

  • Those that are currently ignoring Google reviews: you will begin to get them (Google Local Guides are incentivised to write reviews - see the 'level' and 'points' above and this article), and, given human nature, unhappy customers are about fifteen times as likely to post as happy ones. 
  • Those currently using another reviews system: your dissatisfied customers will begin to post to Google, especially if they happen to be Local Guides. This is a syndrome we call 'deflection' and there is more about that here.
Our advice:
  1. Adopt a proactive review management strategy. How ever much you and your colleagues are still saying 'who posts these reviews?' and 'what king of people pay attention to these reviews' you know the answer to the second question is certainly not 'no-one': apart from studies from the likes of Harvard Business School there is the amount of real estate Google now dedicates to reviews in search and the hard evidence from those that have adopted such a strategy (20% more calls and 30% more visits to your website anyone? See this case history).
  2. If your review management strategy currently involves a reviews site (other than Google): change to a Google-focussed strategy (see the results of doing this in the link above - the client in this case study moved from a reviews site to adopt professional review management).
  3. If you are currently breaking the law (and many businesses, wittingly or unwittingly are): conduct a thorough compliance audit to ensure you are not either cherry-picking (inviting selected customers to post reviews) or gating (using a more formal mechanism to identify happy customers - e.g. a survey, or even another reviews site - before then only inviting proven satisfied customers to post a review).