The success of financial consultancy

Advisor | January 2021

Over the last decade (2008-2019), the Italian world of financial consultancy has experienced a major development: the overall financial activity has grown from 8% to 14% and the assets under management have grown from 20% to 25%. Today, there are over 23.000 active professionals with about 4,6 million clients. 

Financial professionals have made commendable efforts, undertaking their job with expertise and motivation. This is, however, an elite group. 

The real question is, who is assisting the other 20 million clients who have 1.700 billion euros on current accounts awaiting a good recommendation or a mere sign of interest? How can banks replicate, on a larger scale, the successful model adopted by financial consultancy?

The Covid-19 pandemic has hastened some trends and made them irreversible – less use of cash, more online transactions and further reduction of the number of visits to bank branches. 

The ability to manage clients remotely is crucial to the success of financial networks. Today, banks have the opportunity to make a virtue of necessity: several bank branches will close, others will grow smaller. What counts today is who is going to guard bank branches and to what end.

When a client wishes or needs to acquire goods or services, s/he has two options: going to a store or buying online. 

Choosing to go to a store often depends on the value of the good in question or the complexity of the service, the need of advice or the desire for an experience that leads to personal growth. 

Today, we can buy anything online. However, when it comes to buying a watch, a jewel or a car, human contact is important. 

When we cross the threshold of a store, there are two possible scenarios. The first scenario is also the most desirable one: a customer is welcomed by competent and kind staff that provides him/her with useful information or suggestions. Nine times out of ten, clients are satisfied and acquire what they were looking for. 

In the second (less desirable, however not infrequent) scenario, a customer enters in a store and nobody is there to welcome him/her. Only after a long wait, the customer finds an unkind and unprepared sales assistant full of contempt. 

What if that store were a bank branch and the customer an affluent or private client? In the second scenario, the client will end up being unsatisfied. However, the bank and its employees will lose much more than the client.

In fact – borrowing the words of Sam Walton, funder of the largest retail network in the world – any unsatisfied client looks with amusement at the millions of euros spent every year in advertising aimed at attracting clients, and so little spent on training the people who welcome them in stores. 

There is only one chief, the client. A client may fire all the people in a company, from the CEO to the cashier, by simply bringing his/her money somewhere else. 

The culture of the client starts from the centrality of men and women within the service model, but also from the training of professionals. This has become a mantra for financial networks: some among the most important banks have understood its importance, best wishes to the rest of them. 

Nicola Ronchetti