May 2nd, 2012 by Dan Richards, ClientInsights.ca

Tweet

Email This Article

Ask advi­sors whether they value their clients (espe­cially top clients) and care about their future suc­cess and you’ll get funny looks won­der­ing what you’ve been smok­ing. The answer is so obvi­ous that the ques­tion isn’t worth asking.

Ask clients the same ques­tion and the response is often quite dif­fer­ent. Yes, their advi­sor would regret the loss of rev­enue should they leave; but beyond that many do feel taken for granted at least a lit­tle bit. Ask a fur­ther ques­tion about how much their advi­sor cares about the rela­tion­ship and their suc­cess beyond the prof­its they rep­re­sent, and even more uncer­tainty creeps in.

The mes­sage is clear: Just car­ing about clients and valu­ing rela­tion­ships isn’t enough. Clients have to know you care and know that you value rela­tion­ships. To the extent that clients don’t per­ceive this, in the words of the Oscar-winning 1980’s movie Cool Hand Luke: “ What we have here is a fail­ure to communicate.”

Trap One: Doing more of the same:

The first trap for advi­sors is rely­ing on doing an out­stand­ing job to make clients feel appreciated.

One approach is by focus­ing on the deliv­er­ables you’re paid for. Increas­ing the time devel­op­ing in depth finan­cial plans, research­ing invest­ment alter­na­tives, read­ing and attend­ing con­fer­ences, find­ing bet­ter ways to rebal­ance portfolios.

A sec­ond approach is to ramp up client com­mu­ni­ca­tion. Increase the fre­quency of reviews, call to check in more often, host more break­fasts, and send more newsletters.

The chal­lenge with both these approaches is by focus­ing your efforts here, you’re gen­er­ally deliv­er­ing what clients expect for the fees they pay. Of course you’re going to do a great job of research­ing invest­ments and build­ing port­fo­lios and of com­mu­ni­cat­ing.

For­get the fact that you do a far bet­ter job on these than most other advi­sors. All too often by doing more of the same, clients may feel reas­sured they’re get­ting what they pay for; but they don’t feel they’re get­ting MORE than what they pay for.

And it’s get­ting more than what they pay for that makes clients feel appre­ci­ated and val­ued. I’m not sug­gest­ing for a moment that you should stop doing an out­stand­ing job on deliv­er­ing value in your day to day process, and in your client com­mu­ni­ca­tion. In fact these may be a core part of your value propo­si­tion in keep­ing exist­ing clients and in attract­ing new ones. It’s just that for many clients this isn’t suf­fi­cient for them to feel truly valued.

Trap Two: Rely­ing on recog­ni­tion activity:

A sec­ond strat­egy some advi­sors use is to invest time and money in activ­ity that makes clients feel rec­og­nized and appre­ci­ated. There are almost as many dif­fer­ent ways to do this as there are advi­sors; din­ners, boat cruises, wine tast­ing, golf out­ings, and the list is a long one.

There are a few chal­lenges to this approach. First, these events tend to be costly. Sec­ond, given how busy peo­ple are, it can be hard to get top clients out to them. Third, while the results can be pos­i­tive ini­tially, the impact often lessens with repetition.

And finally, unless per­son­al­ized in some fash­ion (exam­ple, an evening for clients who love wine), the very fact that you do some­thing for a large group can under­mine the sense among your clients that this is espe­cially for them. And depend­ing on how cyn­i­cal the client is, you may even get the sense among some clients that “I’m pay­ing for this.”

That’s not to say that the right recog­ni­tion activ­ity can’t send a pos­i­tive sig­nal, because it cer­tainly can. The chal­lenge is that the mes­sage may be hard to get through to all your key clients, and also may wear off over time.

An approach to let clients know you care:

The good news is that in my con­ver­sa­tions with clients over the years, I have run into many who absolutely believe that their advi­sor cares about them and their suc­cess. When I reflect on those con­ver­sa­tions, there are a few recur­rent themes.

Firstly, clients who say their advi­sors care almost always say they really feel lis­tened to. Per­haps the sim­plest way to let clients know you care is to make draw­ing them out in con­ver­sa­tions your top pri­or­ity. The more you ask clients to talk about their sit­u­a­tion and cir­cum­stances and how they feel, the more they see you as truly car­ing. Basic I know, but some­thing that a remark­able num­ber of advi­sors seem to miss.

Sec­ond, these clients gen­er­ally like their advi­sors as peo­ple. They don’t see their advi­sors as obsessed with mate­r­ial suc­cess, or fix­at­ing on max­i­miz­ing their finan­cial out­comes. One inter­est­ing com­ment from clients who say their advi­sors care about them is that sur­pris­ingly often they feel that their advi­sor cares about other peo­ple also. They see their advi­sors as gen­er­ous con­trib­u­tors to char­i­ties and other good works from which they derive no per­sonal gain. If you make giv­ing back to the com­mu­nity a pri­or­ity, con­sider find­ing ways to let your clients know.

Third, not every con­ver­sa­tion should be about money. If all of your con­ver­sa­tions are about finances, some clients won­der what moti­vated the call; your inter­ests or theirs. Con­sider allo­cat­ing a small por­tion of your con­ver­sa­tions with key clients to things from which you derive no imme­di­ate benefit.

Finally, don’t for­get the lit­tle things. When I talk to clients who say that their advi­sors truly care, I am aston­ished how often it’s the lit­tle things that make a big impact.

I recall one widow in her 70’s who said what really stood out for her was that when­ever she went in for a meet­ing, her advi­sor remem­bered exactly how she likes her tea.

Another advi­sor talked about ten min­utes each morn­ing that has made a big impact. At the start of each day his assis­tant gives him a list of clients cel­e­brat­ing a birth­day. He calls them first thing to say noth­ing more than “It’s my annual call to be among the first to wish you happy birth­day.” This inevitably leads to con­ver­sa­tions about their birth­day plans and life in gen­eral. Even leav­ing a voice mail sends a pos­i­tive message.

As you con­sider how you spend your time in the period ahead, by all means focus on the things that it takes to do a great job and the things you’re paid for. But don’t neglect to con­sider the other things often unre­lated to these, that can make the dif­fer­ence in ensur­ing that clients truly believ­ing that you care.

 

About ClientInsights.ca A breakthrough in client communication Not long ago, clients read what you sent them. Today that's changed. In the You Tube world we live in, many investors would prefer to hear from a portfolio manager directly. And instead of reading an article on tax saving or estate planning strategies, more and more Canadians would rather watch an expert discuss the topic. Clientinsights.ca was developed in response to these changes - to deliver information in the form that investors want to receive it. It provides over 150 short video interviews, each about 4 to 6 minutes - you can email them or watch a video along with clients to start a meeting. No matter how you use it, Clientinsights.ca is designed to help you take client communication to a higher level. Dan Richards Founder and CEO, Clientinsights.ca Read more from the author/contributor here.

---

Tags: Ask Question, Client Communication, Conferences, Cool Hand Luke, Deliverables, Extent, Failure, Investment Alternatives, Investments, Job, Little Bit, Portfolios, Profits, Ramp, Rebalance, Relationship, Uncertainty, Value Relationships
Posted in Dan Richards| Comments Off

Comments

Comments are closed.