The Opening Bell

Articles from The Opening Bell

The Age of the Client

by James F. Bell, CFP®, President & Founder

January 2015

While browsing the internet recently, I noticed a couple of references: one was called The Age of the Client and the other, The Age of the Customer. As I reflected on our experiences here at Bell Investment Advisors, I could see that this language was relevant to us as well as many other types of business organizations. In Meghan Lockwood’s blog on The Age of the Client, she observes that prospective clients are now more sophisticated and more informed, thanks to the Information Age, which, of course, includes the ability to easily interact with a broad range of organizations and professionals online, and sometimes fellow customers of a particular organization or company as well. With so much information and commentary readily available to the public, prospects tend to lead the process of engagement with an organization, business or professional, not the other way around. In financial services, whereas the typical engagement used to begin with the prospect requesting advice and orientation from the advisor, in the Age of the Client, the prospect more often tells the advisor what he or she wants and then asks the advisor to deliver. Ms. Lockwood refers to a study performed by The Continuing Education of the Bar (CEB), the leading provider of continuing education courses required for practicing lawyers, which found that, “customers are nearly 60% through the sales process before engaging with the organization, regardless of the company’s pricing or fees.”

The Impact of Personal Values 

Prospects tend to reach out to us for a variety of reasons. Often they are referred by one of our current clients. Other times they are attracted to us by our reputation and identity in the Oakland community, and value our charitable orientation; others are attracted by our team approach and reputation for high-touch customer service; others appreciate our 24 years of professional competence and stable business growth; others appreciate our expertise in the field of mutual funds and exchangetraded funds. Although we are not known as passive investment managers, our prospects and clients are often pleased to learn that we do have a deep understanding of passive strategies, and are able to offer those strategies to our clients when we design their unique portfolio. We are adjusting to The Age of the Client by responding to what each client wants and values. This signals a real change in the marketplace.

The Concern for Family Succession Planning

Some prospects come to us out of a primary concern for their spouse and children, should they precede them in death. They want us to be engaged with their family, in some cases with their children and grandchildren, so we will already be known to them and will be in a position to provide continuing assistance in a future which might not include them. We deeply appreciate the trust placed in us to provide this type of continuing care and concern. We work with a number of widows, widowers and families who unexpectedly find themselves in this situation.

The Emergence of Environmental, Social and Governance (ESG) Policies and Concerns

The increasing demand for investment strategies that reflect personal values shows up in the dramatic growth of socially-responsible funds from about 50 in 1995 to more than 500 by 2012. As this sector has matured, the marketplace has shifted to new, more inclusive language: Environmental, Social and Governance. This phenomenon reflects the growing emphasis in business on environmental sustainability, social and community accountability, and all aspects of diversity in corporate leadership. According to Goldman Sachs, this trend has measurable financial consequences: “Companies that are considered leaders in ESG policies are also leading the pack in stock performance by an average of 25%.”

The Customization of Client Strategies and Services 

Personal values are always specified in the mind of the client. We are proud of our willingness and capacity to customize our client relationships as defined by their values—which can be for or against different human enterprises with respect to active investing, passive investing, alcohol, gambling, community development financing, micro lending, gender and ethnic diversity, environmental sustainability, pollution, climate change, firearms, military weapons, nuclear energy, pornography, healthcare, education, animal testing, labor relations, international human rights, product safety, tobacco, and others. Watch for new initiatives from Bell Investment Advisors in 2015, The Year of the Client.

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