Advisor Impact, Charles Schwab and Texas Tech University Reveal Results of Survey on Client Engagement and Referrals
Advisor Impact, Charles Schwab Advisor Services, and researchers at Texas Tech University today revealed results from the 2010 "Economics of Loyalty" survey.

NEW YORK, NY, December 08, 2010 /24-7PressRelease/ -- Advisor Impact, Charles Schwab Advisor Services, and researchers at Texas Tech University today revealed results from the 2010 "Economics of Loyalty" survey. The surveys, conducted every two years, are designed to help advisors understand the drivers of client engagement and profitability. The data for the 2010 survey were gathered from 1,034 investors, all of whom work with a financial advisor, contributed to/made the financial decisions in the household and met specific asset criteria.

"The 2010 study, an extension of the 2008 survey, sought to do three things," said Julie Littlechild, president and founder of Advisor Impact. "First, we wanted to assess the over time change in the client/advisor relationship. Second, we wanted to refine understanding of what drives client engagement and, lastly, we wanted to refine our understanding about how and why clients offer referrals to their advisors."

Some of the key findings from the 2010 study include:

- Despite a difficult two-year period for investors, trust in their financial professional remained high, with 92 percent of respondents giving their advisor a four or five (out of five) rating.
- Seventy-seven percent of those surveyed were satisfied and loyal, with 93 percent saying they are either somewhat or extremely likely to continue to work with their financial professional.
- Still, only 29 percent of respondents said they had provided their advisor a referral in the past 12 months.

"What the study found is that while the numbers are positive, there is a clear disconnect between satisfaction, loyalty and referrals." Littlechild said. "To explain that disconnect, we built a model from the data which we refer to as the 'Anatomy of the Referral' to provide a deeper understanding of why clients refer and when they refer. Our goal, with our new report, is to not only provide the data, but a clear action plan for advisors who want to engage clients and then leverage that higher level of commitment into more referrals."

"The good news is that the study found 58 percent of 'engaged' clients referred clients because they wanted to 're-pay' their advisor for a great experience. In other words, engaged clients want to help their advisors continue to be successful," Littlechild said.

"This study underscores that there is a direct economic correlation between having 'engaged' clients and having a thriving practice," said Nancy Allen, Director, Business Consulting Services with Schwab Advisor Services. "These 'engaged' clients are a great source of referrals for advisors, they just need to know how to close the gap by working with the right clients, having the right conversations and asking the right questions. The key is to turn a sense of willingness and motivation into action," she said. "We are proud to sponsor this important work."

"This year's study gets us closer to cracking the code to client satisfaction, client loyalty and client referrals," said Deena Katz, associate professor of personal financial planning at Texas Tech University, whose research team provided assistance during the survey process. "The Economics of Loyalty reports, both in 2008 and 2010, clearly demonstrate that when advisors move clients from merely 'satisfied' to 'engaged,' advisors can substantially impact the profitability of the relationship."

A full report, The Economics of Loyalty: Anatomy of a Referral, is available on the Advisor Impact website at www.advisorimpact.com or by contacting Josele Quejadas at jquejadas@advisorimpact.com or 877.686.0660 x221. To learn more about Advisor Impact, visit www.advisorimpact.com.

Journalists are invited to download an audio recording in which Littlechild summarizes key survey findings and explains the implications for financial advisors.

To launch the recording, click here: http://www.audioacrobat.com/play/W6JYtTGf.

Press Release Contact Information:

Al Martin
Impact Communications
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