Have you noticed how banks like NatWest and TSB are telling existing account holders that the best rates are no longer the preserve of new customers? It’s a policy that rewards loyalty rather than the ‘rate tart’ mentality we’re used to. I hope it lasts.
Quite why it’s taken them so long to wake up to the fact it costs more to acquire a new client than to keep an existing one is beyond me – every business book I’ve ever read extols the value of existing clients over new.
Unfortunately this new found common sense is rare in the world of financial services. Call up any client services team and you’ll see how short sighted most companies are when differentiating between customers old and new.
Ask for a new business quote and they’ll be on the case tout de suite, even though in many cases they’ve put a lot of resource into an online capability. Whatever, they’ll soon have a new business team phoning to see what more they can do to secure the business. Meanwhile a request for a valuation (or any other servicing issue that you’d happily do online if you could) won’t be dealt with for 10, 20 or even 30 days.
It’s not just time differences that are worrying; companies will also apply double standards depending on what you ask for. Firms bend over backwards to secure new business (shall we come and collect the cheque sir?) yet display complete apathy otherwise. And if you try taking business away, watch them throw belligerence and un-cooperativeness in the mix.
Take the pension company which took over two weeks to provide a valuation, yet was on the phone as soon as surrender papers were submitted. “What can we do to retain the business?” it asked. How about showing the same sense of urgency and “can do” attitude to servicing requests as you do to new business and surrender requests?
Or double standards of a Sipp trustee which, when asked to transfer out a property Sipp, found every reason to delay the process. Presumably to charge fees for as long as possible. It didn’t skip the client’s notice that a possible property breach of covenant only became an issue on transfer, rather than at any time in the previous six years.
It’s not just the traditional providers; private banks and discretionary management firms show the same attitude.
With lower overheads and fewer shareholders to satisfy, small owner-managed firms like mine may have the edge. With a high proportion of recurring income the need to chase new business is not as rewarding as working with existing clients. Rewarding in every sense, not only financially but with a satisfaction seeing plans and strategies deliver great outcomes for clients over time.