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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
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