How to Ask Clients for Feedback—and Act on It

If you Google “client advisory board + financial advisor,” you’ll end up with more than 3 million results from a host of sources you’re probably familiar with: Michael Kitces, Financial Advisor magazine, sponsor companies, and others. Many of these results speak to the power of an advisory board in giving strategic insight on how you can better position your services and grow your firm.

Despite this, many advisors believe that they already know what their clients want without formally asking them. In neglecting to ask clients for feedback on the critical questions that shape their business, advisors may perceive the best path forward very differently from their clients.

Several years ago, an advisor talked with me about adding college planning/funding services to his suite of offerings. He had looked at his client base, determined that a healthy percentage had children about to head off to college, and concluded that those clients would be interested in college funding strategies. I suggested that he ask clients for feedback to confirm that his perception was accurate. It would take a lot of time and energy to put this service in place, from education for him and his staff, to supporting processes and forms, to marketing materials and website information. If this is what his clients wanted, it would be worth it, but what if they didn’t?

After tallying the results of the survey, guess what? College planning/funding services ranked last on a list of nine potential new services. The advisors’ clients were most interested in obtaining support in caring for elderly parents, as well as for their own retirement income plans.

The lesson here is that we don’t know what clients want unless we ask. But asking is just the start—you have to actually act on what you’ve heard.

In his article “The Real Value in Voice of the Customer: The Customer Experience,” Michael Hinshaw, CEO of McorpCX, a customer experience management company, explains that most firms today are competing on the customer experience. This shouldn’t be a surprise. We’ve been talking for years about the commoditization of investment advice in our industry, so it stands to reason that the real differentiator lies in something more intangible. What this means, though, is that firms need to regularly ask their customers about how they are doing. Hinshaw writes, however, that only 29 percent of firms that ask clients for feedback actually use that insight in their decision-making processes. Further, nearly 75 percent of those firms don’t believe their customer feedback programs effectively drive actions.

This is where firms are missing an opportunity. The FPA Research and Practice Institute Practice Management Study found that advisors who employ advisory groups (as well as other forms of feedback, such as surveys and simply asking for feedback during review meetings) and incorporate the feedback they receive can realize 10 percent–50 percent more growth than advisors who don’t consistently solicit feedback. While the research is a few years old now (it’s from 2013), it’s worth considering the implications. Who wouldn’t want to start a client advisory board if this level of growth could be the result?

Let’s start with the basics. A client advisory board typically consists of eight to ten people and meets about two to three times per year. (The Commonwealth Advisory Council, for example, includes a small group of top-producing advisors and meets in the spring, as well as during our National Conference in the fall.)

The role of the board is to help you obtain open, honest opinions and feedback regarding your current and/or proposed business activities, such as:

• Feedback on existing services—in other words, what clients most value today
• Suggestions regarding additional value-added services your firm might provide
• Ideas relative to your marketing or business plan
• Suggestions for getting referrals
• Input on terminology you’re using (e.g., reaction to a vision statement)
• Reaction to office space or location
• Views on proposed strategic changes, such as moving an office

As you work to put your group together, whether on your own or with input from colleagues or staff, it’s important that you know the answers to the following questions:

• Why are you creating an advisory board? See the list above for potential reasons.
• Who sits on your board: clients, strategic alliances, other small business owners? Be sure that you include people whom you respect and whose feedback would be valuable. One approach is to identify the types of clients you want more of and invite them to join the board.
• Will members rotate? If so, on what schedule? It’s a good idea to bring in fresh perspective after a period of time—say, two years.
• How often does the group meet (e.g., quarterly, semiannually, annually)?
• What types of questions/issues do you bring to the board? To get actionable feedback, it’s important to ask open-ended questions that get at what, why, where, how, when, and who.
• What is a typical board meeting like?
• Do you have a meeting facilitator? Engaging a third-party facilitator can be beneficial, as it can put you, as the advisor, in the conversation as opposed to in front of it as the leader.

Keep in mind that you may run into challenges in the beginning. You may not hear what you want to hear, for example. Your members may be too nice, or they might not get along. It’s best to anticipate these issues so you can be prepared to facilitate the group and better reach your goals. And remember, you don’t have to act on every bit of feedback you receive from clients, but you do need to acknowledge that you’ve heard what they said and will take their thoughts into consideration.

At Commonwealth, we believe in the power of client feedback to effectively guide our strategic decision-making. For that reason, we have developed a variety of channels by which to ask for our advisors’ thoughts and perspectives regularly. And even more important, we act on that feedback.

Give your clients the opportunity to tell you their honest opinions—whether by forming an advisory board or by simply sending out a survey on new firm initiatives. The feedback you receive could become a valuable tool that guides your firm to future success.

How does your firm ask clients for feedback? How have your clients’ thoughts and opinions guided your decision-making? Please share your thoughts with us below!