In brief
The UK’s Consumer Duty obliges firms to consider client behavior and prove good outcomes. The institutional Client Behavior Benchmark does precisely this. Read on for our plan to roll out an Intermediary Client Behavior Benchmark for the UK market in 2025.
Prove good outcomes at every stage of the client journey
The objective of the UK’s Consumer Duty is clear: along with other regulated entities, asset managers must prove that they are achieving “good outcomes” for clients by “considering how [clients] behave … at every stage of the journey.” This is precisely what Accomplish’s Client Behavior Benchmark does today for institutional asset managers.
For wholesale businesses, the Joint Trade Association has worked extensively to identify sales MI for financial advisors (monetizable behaviors).
This is an essential part of the solution, but to satisfy the regulation, we must also address their non-monetary behaviors and solve for identifying “good” outcomes. Everyone might agree that we are still on a journey.
If clients do not give you their time, you should not expect their money
In terms of progress so far, the industry response has focused on the client behaviors that involve transfers of money. Understanding how clients buy, stay, and buy more is essential, they are high risk areas, and these ‘dollarizable’ actions are, by far, the most eye-catching client behaviors.
However, they create only a very narrow and potentially unrepresentative insight into the client journey. As Accomplish’s analysis above shows, this would leave important gaps in asset managers’ understanding of how clients engage with them.
Unlike a single action (like buying), engagement is a category of behaviors you can subdivide into digital and in-person engagement across both the pre- and post-sale stages of the client journey.
For example, a financial advisor’s pre-sale behaviors while selecting a fund for their end client may include:
- Engaging with online thought leadership.
- Attending webinars, conferences, and training events.
- Requesting additional commentary about a fund.
Meanwhile, their post-sale behavior will likely include monitoring fund performance and requesting meetings with your relationship manager or product specialist.
These types of behavior are ‘gifts of time’, and they are just as measurable as financial transfers. The Consumer Duty is clear that a complete solution would need to cover how clients behave across the journey and be able to prove good outcomes for them. As a result, engagement data is a vital part of the solution and, without it, asset managers may struggle to fulfil their duty.
Completing the solution
Our proposal is to launch an Intermediary Client Behavior Benchmark in 2025. In one click, we will let asset managers pinpoint, in time and money, where across their pre- and post-sale experiences they out and underperformed at stimulating behavior in advisors.
“Good outcomes” anyone?
The new Benchmark would build on the JTA’s progress, so there would be no need to reinvent the wheel, to have siloed datasets, or to leave firms marking their own homework.
Crucially, this will not be just a data-gathering exercise: firms will pool their data with Accomplish as independent behavioral experts that asset managers already trust. We will then generate unique client insights, data-driven hypotheses, and unconflicted recommendations.
Additional use cases include leveraging patterns of client behavior, pinpointing abnormal client leakage on your sales funnel, and ensuring marketing, sales, and service flow seamlessly into a coherent client journey.
An intermediary Client Behavior Benchmark built on proven capabilities
To achieve this, we will build on Accomplish’s proven capabilities:
Behavioral science – this starts with our practical experience using behavioral science to identify and define the actions asset managers want to see clients display.
Data science and analytics – once identified, we translate ‘target behaviors’ into metadata that specifies how firms should measure them consistently and comparably. We then perform rigorous quality checks before allowing any submissions into our dataset, where they undergo expert scientific analysis.
Seamless technical integration – over the last few years, we have perfected the Benchmark’s interface with Microsoft’s Power BI. As a result, in one click, a user in an asset management firm can now interact with their benchmarking data through a polished and intuitive UX that sits across three levels:
- A high-level executive scorecard.
- The end-to-end client journey.
- Detailed analytics for each client behavior.
Information security – lastly, all of this takes place within our information security management framework because, at Accomplish, nothing is more important than the trust firms place in us. As a result, our information security activities are constant, ongoing, and relentless.
Designed for asset managers by asset managers
The best way to build a benchmark is to put the users in charge. That is how we built the institutional version, and we will do the same for the intermediary one.
Specifically, we plan to start in the UK, where we will work as a FinTech member of the Investment Association to generate the collective action needed. We will create alignment on target clients and behaviors, assess the suitability of the new metrics, and test them before a full roll-out.
The result will bring three key benefits:
- Wholesale asset managers will be compliant and have a new way to stand out in an increasingly tough market.
- The UK’s financial advisors will be better informed, supported, and able to do their essential work.
- The UK industry will continue to lead the world.
If you would like to stay close to the new Benchmark as it develops or even influence its design, send us your details and we will keep you in the loop.
