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?

Woodford

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.

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.

Moderation

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.

Conclusion

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...

• the CMA regulations - and our analysis of them
• moderation - a full explanation
• a case history - how a business that engaged drove up its calls and clicks

Wealth managers - there's a world of opportunity out there

Last weekend the Financial Times ran one of its regular surveys of wealth managers; so far so ordinary. It also ran articles in the same supplement addressing two important issues:

• 'Generation gap that managers struggle to fill' - referring to the poor take-up of wealth management by the young(er) generation. On top of that apparently, sixty-six percent fire their parent's wealth manager as soon as they inherit and (according to a 2016 survey) only fifteen percent of current clients currently expect their family's relationship with their wealth manager to survive their death.

• 'Managers adapt to appeal to female clients' quoted a report entitled 'The Financial Power of Women' published by Fidelity International* saying 'women's default position is cautious' and 'women often do not feel confident making decisions about saving [and] investing'.

*Fidelity International (London) currently has no reviews showing in a Google search.

Now comes another killer statistic: this week a survey by EY found that a third of all wealth management clients switched providers within the last three years. Alice Ross of the FT goes on to say 'Wealth managers are painfully aware of all these statistics.'

Now let us throw in another number: at least eighty-four percent of consumers now trust online reviews as much as they trust recommendations from friends. 

That's not our headline, it is from an article in Inc.com quoting a survey by Bright Local. And there's more (Bright Local again):

So here - below - we publish a table of our own, this time focussing on Google consumer reviews relative to each manager's published number of clients/investors. This is what the firm at the top returns in search:

With few exceptions, this is par for the course. Some have none:

This table raises some obvious questions. Let us see...

Do wealth managers see the value of Google reviews, or of any reviews at all? Some do see the value of less visible forms of review - Nutmeg, for instance, is paying Trustpilot (Google reviews are free):

AJ Bell subscribes to another fee-paying service:

Do wealth managers' potential clients see Google reviews? This bears some scrutiny; wealth managers gain new clients in a myriad of ways - personal recommendation, professional recommendation, through their advertising and marketing and through Google. How do we know the latter? Because many wealth managers are using Google PPC - here are two businesses that have bought Google Ads for the search term 'Sarasin asset management':

And here are two more, this time for the generic search 'wealth managers':

Interesting that these two firms - paying Google for the advertisements that you see above - would seem oblivious to their potential client's next (and obvious) step - to refer to their reviews (highlighted right bang slap in the middle of their advertisement)?

So the first part of the answer is 'yes - because they are buying Google ads'; the so far less well understood answer is 'yes, because every time a potential client looks them up - even if they are not consciously looking for reviews - they are being served reviews by Google, if they have any.'

But if they don't? Here's AJ Bell again:

So here we have a conundrum: wealth managers do subscribe to reviews sites but they don't ask their clients to write reviews to Google. Why do we suppose that might be? It is almost certainly a combination of the following factors:

• Fear: they know that Google reviews can be a Pandora's Box, that a review once written there can seldom be taken down.

• Google reviews are not being 'sold', whereas Trustpilot and Feefo have sales forces targeting businesses of all kinds.

Let's look at a business that has found a way to address the issue of overcoming the understandable 'fear' of engaging with Google reviews: Winkworth, the well-known estate agents. Here they are in Blackheath:

The differences are immediately obvious: 

• Their own reviews show in organic search (saving them having to pay Google or a reviews site) - top left.

• Their own reviews - and a link to them - appear in 'Reviews from the web' - bottom right - boosting their website's SEO as well as providing a welcome resource for potential clients to reference on their website.

• They have a great Google score - 4.9 - top right.

• They have great Google reviews a click away:

• They look impressive in a generic search:

So what?

The impact this has on a professional service business is profound. It should expect:

• volumes of inbound calls and clicks through to its website to rise significantly leading to...

• ...significant savings in all other areas of advertising, marketing, public relations and all other promotional activities

So how did the business above 'manage out the fear factor'? They adopted review management - HelpHound's review management to be precise - and a big part of our function is to moderate every review that flows through the business's website and then on to Google. Not to deflect negative reviews, but to ensure that reviews are factually accurate and don't mislead potential clients or anyone else who reads them. 


The opportunity

If we look at the list above again we can see just what an opportunity the first mover in the area of wealth management has if they have the initiative to grasp it. The wealth managers listed have, between them, 2,217,730 clients, fewer than 0.00004 % of whom have written a review. That's a massive untapped resource in review management terms.

Over to you, wealth managers.

Further reading...

• Essential articles - an index of 'must reads' and some great case histories 

Thousands could lose their life savings - why reviews matter

Estimates vary, but the Telegraph is saying that up to 20,000 investors are affected, many with their life savings at risk.

But why? With this a search away...

And these...

The point? That a number of people - the exact number will never be known - were saved from investing with this business, not by the City regulator, the FCA, but by Google - in fact, by just sixteen people writing a review on Google (one is positive!).


Duty of Care

Businesses surely have a duty of care to their investors, and especially businesses in the world of finance. And for reputable firms we would sincerely suggest that that duty of care includes ensuring that they engage with reviews, if only out of pure self-interest.

Just how many people would have avoided using Beaufort Securities if responsible and reliable competitors had looked good in search. Like this...

The most reviewed investment advisers in London - probably. But, from the look of it, they only engaged when they were the subject of a damning 1* review first. We suggest that many FS businesses can learn from Holder & Combes, and engage before they have to.

But just how many investment advisers or wealth managers have paid attention to reviews? The answer is: pitiably few. See this random search on 'investment advisers' in London...

  One business in seven has just one review - astonishing in 2018

Helpful for potential investors? We don't think so.

What about the industry leaders? 

Fidelity...
 

Aberdeen...

M&G...

 
Brewin Dolphin...

Suprised? So were we. So we began by asking ourselves the obvious question - and soon the answer became apparent...

Why so few reviews?

The answer is summed up with one word: 'fear'. Fear - by the business - of inviting negative reviews. After all, as the label on the tin says: 'the price of investments can go down as well as up' and what investment adviser is going to expose themselves to reviews that say 'mine went down'? 
 
Our answer to the investment community: all of you. Because of the aforementioned 'duty of care', but also for the following reason...

 This Google review is damaging enough in itself - the fact that it is served by Google as the first review seen by anyone referencing this business (as 'most helpful' and 'most recent') makes it doubly so. In addition the business has failed to respond and it has been voted 'Helpful' by two readers in the last two months (we estimate that 'Helpful' votes represent less than one percent of those that have read a Google review - so this review's reach is likely to stretch into the hundreds).

• if you don't engage you risk leaving the field clear for your minority of unhappy clients, and they will find their way to Google eventually, and then you will find your reputation unfairly tarnished

Managing the 'fear'

That's simple: just take estate agency; estate agents - especially lettings agents - are hardly at the top of the list of 'most admired' occupations, so we don't think those in financial services have anything to worry about if we can produce results for them like these we have produced for good estate agents...

And focusing on the positives...

   

Back to Holder & Combes - for anyone doubting that having great reviews drives new business, read the first line

Great review management is like great investment management: it produces great results. Not just great reviews and great scores on Google (which it will), but it will actively encourage people to use your business, and since September last year, you will be able to measure that like this...

   

   This is a screenshot of a client's Google My Business report - if you don't recognise it as being just like the one your business receives every month you will need to find out who in your office is receiving it (if you draw a blank, just ring Karen Hutchings here and she will walk you through the procedure for having it readdressed) 

 
So: over to you in the world of investment management; recognise that your potential clients/investors will welcome reviews from your existing clients, and that reviews can provide that crucial differentiation between the kind of business with which they will be happy to entrust their life savings and those that perhaps they should be wary of.