Getting and Keeping Clients No. 1 Concern for Financial Services Firms

Forty-nine percent of respondents expressed concern about getting and keeping clients, according to the survey report in The Cerulli Edge. Salesforce issues (15%) and product rationalization (10%) were a distant second and third on the list of business concerns.

As the industry matures and advisers and investors alike become more sophisticated, having an effective salesforce that is targeted appropriately presents a challenge, Cerulli said.

With client acquisition and retention the number one business challenge cited by survey respondents, it is understandable that the top two firm watchwords chosen by poll participants were sales (39%) and relationships (38%). Those were followed by brand awareness and retirement (26% each).

Advice – last year’s top firm buzzword – dropped to fifth place in the 2008 survey.

Coverage/economics was chosen by 21% of survey participants as the salesforce issue they anticipate will be their most complicated in 2008. Consistent customer experience and integration between institutional and retail sales were each chosen by 20% of firms.

Open-end mutual funds remain the primary product focus in 2008, the survey found. About 79% of respondents chose open-end funds as the major focus, and 53% gave it the highest priority. To meet investor demands and stand out from the competition, fund firms have refined their product lines by consolidating funds with similar objectives, acquiring funds with attractive track records, developing innovative products, and hiring managers specialized in a particular asset style as subadvisors.

The survey showed the growing popularity of alternative investments, as 77% of financial services firms chose hedge funds/private equity to be their main product focus for 2008. “These vehicles, previously used by high-net-worth investors or institutional investors, have moved downmarket, which creates more opportunities for firms interested in this arena,” Cerulli said in the article.

Survey participants are subscribers of The Cerulli Edge – U.S. Asset Management Edition, Managed Accounts Edition, or Advisor Edition. They represent a variety of financial services firms, including asset managers, distributors, insurance companies, banks, and vendors.

The survey results can be found in the The Cerulli Edge – U.S. Asset Management Edition December 2007 Year-end Issue.