From Svitlana Altherr, CEO von Axioma Wealth Management AG
It is well known that when markets are calm, portfolio returns are in positive territory, clients feel confident and tend not to seek explanations or information from asset management companies. The success of the asset management company is also their success.
But as soon as any unexpected fluctuations in the financial markets occur, as soon as the portfolio performance falls below the client’s expectations, investors may be so disturbed by the situation that they take irrational decisions contrary to the recommendations of the asset management company, which in turn may not only adversely affect the investor, but also cause headaches for the asset management company.
In order to avoid unnecessary problems and to encourage the investor to go hand-in-hand with the asset management company and through challenging times, it is important to have a well-established customer expectation management cycle in place.
The key criteria for a successful customer expectation management process are:
- regularity of communication
- data transparency
- partnership building
Each successful company must develop its own approach, tactics and methods based on its customer segment and the range of products and services provided. However, there is no doubt that regular communication is the very foundation upon which mutual trust is built and maintained. The pandemic has shown us all how important it is to have information sharing on a regular basis and how its absence has a negative impact on relationships with customers and partners.
When preparing information materials for investors, it is important not only to provide them with transparent information about the reasons for the situation in the market. And what steps the asset management company is planning to take with regard to its investment strategy and for what purpose. But it is also important to anticipate the questions and concerns that investors may have in this particular situation and answer them comprehensively in advance.
It is very important that information is provided in a concise form and is understandable to both retail and professional clients. Involving the investor in the decision-making process by informing him about what is happening will allow the asset management company to form the investor’s feeling of being a participant in the decision-making process. The investor knows and understands the reasons that led to a certain situation in the market. The investor understands the strategy the asset management company has chosen and the goals it is pursuing. His concerns have been voiced and answered comprehensively, and he understands the short- and long-term outlook for the development of events.
It should be remembered that information materials should be easily accessible to the client. In today’s digital world, regular publications on asset management companies› websites and social media profiles have proven to be a positive experience. These may include video interviews with portfolio managers, blogs with overview of weekly results and macroeconomics research. Live Q & A Sessions are widely used to maintain feedback.
Compliance with these simple but very important rules will allow the asset management company to instill confidence in investors, provide them with comfort and thereby not only maintain but also increase its client base, which is especially important in difficult times. (Axioma Wealth Management/mc/ps)