Last week I responded to a question from an individual who recently completed his undergraduate degree and was hired into an entry level role in client service at a large asset management firm. He wanted to know how he could distinguish himself and excel at his new job. He also wondered how to have a successful career in client service which I could not respond to last week because of space constraints. The easy answer to the last part of his question is “it really depends” on how successful he is in distinguishing himself and excelling.
How to make client services a career
However, having a successful career in client service has a lot to do with how the asset management firm views this role internally, the extent to which they believe it is important to provide their clients with more than just superior risk-adjusted rates of return and what measures they have taken to ensure they not only attract and retain good talent but also how they will professionalize and institutionalize the client servicing role. An asset management firm dedicated to all these goals needs to ensure there is a clear career path with a compensation structure that incentivizes the individual to want to stay in client service and to move up vertically within this important discipline at the firm.
While I know this is a generality and slightly unfair, it used to be that individuals at an asset management firm would work in client service with the hope that eventually they could move into “sales” because that is where one could be handsomely compensated either formulaically or discretionarily, based on their success in bringing in new business. Many people wanted to matriculate out of client service because compensation was not structured with incentives for account retention or growth, and it was clearly not structured to be equal with pure “salespeople,” nor on a par with “product specialists” who were part of the marketing department or part of portfolio management. Moreover, client service was usually considered a means to a different end and not an end unto itself. Many believed they could not have a “successful career” moving vertically within the client service structure and hierarchy of a money manager.
At one of the large asset management firms where I was head of global marketing and client service, I actually was successful in creating an incentive compensation program for client service team members and would suggest more firms move this way to attract, retain and develop good talent. At this firm, client service individuals were brought into a client relationship after the account was opened and the salesperson went on to solicit other prospects for “new business” for the firm. To recognize client service's contribution to account retention, client satisfaction and asset growth, compensation was changed so that the individual assigned to an account received a percentage of the fee revenue from the account (as long it remained a client of the firm). Moreover, at my old firm, the client service person was compensated similarly to a salesperson if the client service person successfully cross-sold another product that the firm managed but was not part of the original mandate.
The point is, it is possible for an asset management firm to establish metrics around effective client servicing, and those that perform this important function should be compensated using incentives and recognized for their true value-added. I believe as more money managers understand the value of client service, individuals that are good client service personnel should be able to and want to make a career out of this important function.
However, the career path has to be clear and the compensation has to be competitive, not only when compared to similar jobs externally but competitive to other positions within the same firm.