Cindy Runger Balas, an attorney turned financial advisor, was hoping to become a million-dollar producer by 2013, but fate seemed to be conspiring against her. She had a baby and then the Great Recession struck, and it seemed she wouldn't reach her goal.
"I took great pride in helping my clients during the downturn, but it was hard coming in every day and hearing about people losing their jobs," says Runger Balas, a financial advisor at RBC Wealth in Seattle. Her numbers started to suffer. That's when she decided to take action and join the firm's FA Forward program, designed to turn around the production numbers of advisors.
FA Forward and two other programs run by RBC — Jump Start and Top Gun — are part of a practice management strategy that the firm believes helped it snag the top spot on the recent 2011 U.S. Full Service Investor Satisfaction Study conducted by J.D. Power & Associates, a unit of New York-based McGraw-Hill Cos. The survey of more than 4,200 investors is nearly a decade old, but "in its two years of being ranked, RBC has scored really high," says David Lo, J.D. Power's Director of Investment Services and Mortgage Practice Services and Emerging Industries Division.
RBC was rated first in customer satisfaction this year after coming in second last year. In fact, the firm scored 814 out of a possible 1,000, when the average was 772. RBC performed particularly well in an area of the survey called "The Advisor Factor," in which there are seven specific measurements. On a ten-point scale, RBC scored a 9 or higher in five categories and above 8.5 on two others. "As you improve satisfaction, you improve loyalty," Lo says.
RBC beat out bigger and better-known wirehouse rivals, such as Bank of America Merrill Lynch, UBS, Morgan Stanley Smith Barney and Wells Fargo.
"Why are the wirehouses not performing as well?" asks Lo rhetorically. "They are more competitive as you get into higher wealth levels. The expectations of clients, as they accumulate more wealth, gets higher," Lo says. "The number of average contacts is higher for the wealthy." To get to the same level of satisfaction for a very rich client, the average number of contacts jumps to seven or eight instead of two, Lo explains.
Another area where RBC fared better was whether the advisor contacted the client about new products or services four or more times in the past year.
RBC scored well with 63% of respondents compared to 47% for UBS, 46% for Morgan Stanley Smith Barney, 47% for Merrill Lynch and 39% for Wells Fargo. But RBC didn't do quite as well as the wirehouses when it came to returning contact within one business day. While RBC got an admirable 79%, just above the 78% average, UBS grabbed 86% and Wells Fargo 83%.
Even so, RBC is proud of its placement in the survey. Mary Zimmer, who leads Wealth Management Services and serves as head of International Wealth-USA for RBC, says, "our goal has explicitly been to be the best advisory firm and be the client's first choice."
In the wealth management business, "there is a direct immediate and measurable connection between employee engagement and how they treat their clients," says John Taft, chief executive of RBC Wealth Management-U.S. "So it is not surprising to me, but extremely gratifying, that an independent survey validated what I believe: If you can create a culture where the employees are engaged, it will translate into client satisfaction and to me that's been the secret of our success." RBC Wealth Management in the United States has more than 2,100 financial consultants, 200 offices in 42 states and $227 billion in assets under administration. It is a unit of Royal Bank of Canada and, notes Taft, it has "been stable when our competitors have dealt with some historic turbulence and volatility in their business."
One way to achieve superior client satisfaction is to give better service to a smaller number of clients, Christopher "Chris" Detmer says. "The truth is, our practice grew tremendously in the first 20 years of launching it," says Detmer, who runs The Washington Wealth Group of RBC Wealth in the nation's capital. "My business was running me rather than me running my business, and my quality of life deteriorated significantly. So I said I needed some help."
Detmer, 49, along with his partner Aaron Brachman, a 31-year-old financial planner, ran a very profitable practice so they went into the program known as Top Gun for high-end producers at the firm.
Detmer recalls that it was a "forum to unlearn poor, inefficient ways" of operating while acquiring new skills. "We were ready, we were willing and we were hungry for that type of offering," he adds.
The forum was a full-day event in Minneapolis, where RBC is based. Brachman recalls that they learned about putting the scope of their services into tiers and that they broke down their book and assessed the time spent on each client.
"It was extremely important to tier our clients into A, B and C rankings," Detmer says. "In the first 10, 15 years of one's career, you treat all clients and prospects equally. But then you wake up and have 400 clients, and all you're doing is reacting," he says. "What we did in order to control our destiny is reduce the number from 420 households to 80. That freed up a lot of time to be proactive rather than reactive."
What's more, says Brachman, "there was not a single client who was upset with the move." The team placed the clients they decided to remove from their practice with other RBC advisors.
"It was a very, very smooth transition for them," Brachman says. "Now that we had this time, we put a systematic process in place to contact clients, and on the asset management side, we now had an efficient way to manage a book of business."
Detmer adds that his team streamlined the investment management process for clients. "We largely use open-ended mutual funds with individual fixed income with some alternatives," he says. "But the mutual funds we use-everybody owns some percentage of the same funds that we are fans of-but the mix is different. The product line is relatively small and easy to keep track of."
And, Brachman says: "It allows us to focus on solid risk-adjusted returns."
As a result of these programs, Detmer and Brachman are more selective about clients. "We do not take on anybody that we're introduced to until we go through at least two interviews to determine if they are right for us and are a compatible fit for the long term," Detmer says. "We say 'no' a lot, which is new."
Detmer and Brachman pared their client list and initially passed on nearly $300,000 in annual revenue.
"But, it only took six months to replace it and we got a stronger fan base," Detmer says. "That surprised us. We went into it with a little bit of skepticism but it gave us control and a deeper relationship with clients."
That's exactly the aim of RBC's three programs, says Ward Ring, director of wealth consulting at RBC Wealth Management-USA. FA Forward, Jump Start and Top Gun grew out of a strategy project initiated three years ago, Ring says.
Ring explains that Top Gun was set up for million-dollar-plus producers, many of who are on teams. Jump Start is geared toward those producing a minimum of $500,000 and is more like a one-day boot camp with eight weeks of follow-up conference calls and homework.
Finally, FA Forward is "really a way to catch everybody in the country who wanted to participate," Ward says. Branch managers were essential to the FA Forward program, which was administered via a national conference call from Minneapolis. "The more we can involve other advisors speaking and sharing, the better," Ring says. "From a pure metrics standpoint, we've seen significant production increase (especially with FA Forward)," Ring adds. "Now we're moving toward fewer events and more individual coaching."
For Jim Wing of Providence, R.I., Jump Start was a chance to spend a day focusing on how his business was organized since he had already reduced his number of clients to 500 from approximately 650 when he converted to a mostly fee-based business.
"Certain clients — the squeaky wheel clients — were driving the practice," he says. So, 18 months ago, the 52-year-old veteran advisor went to a Boston hotel to experience Jump Start, where Wing learned how his practice should be run.
"There were eight follow-up calls and we had different assignments," Wing says. "We had to do them." Among those assignments were: going through the clients, listing them by assets and determining when the team did a review. There were deadlines. And, professionals from other RBC departments such as insurance and mutual funds, touched based with those in the program to let them know about the resources that were available.
The results for Wing? "I would say now, everything is boom, boom, boom — all lined up. I have a great sense of peace. Everything is organized; nothing has slipped through the cracks."
Now Wing plans to attend the next higher level program, Top Gun, in September in Boston for the biggest producers. He is bringing his assistant with him.
Moving On from FA Forward
Cindy Runger Balas, the Seattle-based advisor, was so happy with FA Forward, she has taken it twice and recently completed Jump Start.
A Vietnamese immigrant who became an estate planning and insurance attorney, Runger Balas worked for the state senate in Olympia, Wash., before becoming a financial advisor.
FA Forward is made up of six weeks of conference calls led by a coach with the support of the branch manager. Runger Balas found out where she was going wrong and made changes. She no longer does trades. Now, she says, "I'm doing holistic planning."
It has made a difference. "Often I would be interrupted by the ding on my email and so, like Pavlov's dog, I would check it," she says. "It's a big time waster. When you're doing these financial plans, you need to focus." Runger Balas is also having her assistant field her phone calls and blocking out her time better. "If something is urgent, she knows to interrupt me," she says. In addition, she now takes client calls from 8 am to 10 am; she holds meetings from 10 am to 1 pm. She works on business development, which is essentially prospecting, between 1 pm and 2 pm.
It was during Jump Start that Runger Balas pared her client list by 10% to 190 clients. Her goal is to have 150 clients that she services well. Her practice is made up primarily of pre-retirees aged 40 to 60 who are mostly professional, dual-income families concerned about retirement and how to put their children through college.
With top clients, Runger Balas now consistently reaches out to them via monthly phone calls, returns calls within an hour, has annual meetings, sends them birthday cards, holds an annual client appreciation event and offers educational seminars twice a year. "That's different from B-level clients who get a quarterly call, but also, as needed, and return phone calls within four hours."
Runger Balas has gone from needing help in 2009 to increasing her assets by 30% and her revenue by 40% this year.
The programs have given her the tools to deliver better service to clients. "Some of the things that [the program coaches have] told us to do is to ask for feedback consistently from clients," Runger Balas says. "So I ask them about the level of service I'm providing and if there is anything else I can do. Clients really appreciate you asking that. The other day I asked that question, one client said, 'well, I've been thinking about long-term care insurance. Do you do that?' and I said 'Yes, I do. Let me tell you about that.' It wasn't sales-y, but I was responsive." She says she now feels "more focused and in the moment for my clients," adding: The biggest thing is the client service model — what level of service I would provide to each of my clients."