Journal of Financial Planning: December 2023
Kristine McManus is chief adviser growth officer at Commonwealth Financial Network, Member FINRA/SIPC.
The financial advisory industry often tells new planners and career changers to focus on mastering the hard skills of the job, such as portfolio management, tax diversification, and estate planning. Those are crucial skills to tackle, but for advisers looking to grow and succeed, the soft skills often make the difference and truly set an adviser apart. And high on the list of interpersonal strengths to cultivate is communication.
Communication with clients isn’t just what you say or the information you impart—at the end of the day, it’s how you make them feel. Did your clients feel that you listened to their concerns, were instrumental in setting their key goals, and understood what was most important to them?
According to YCharts research, clients resoundingly answered that the frequency and style of their advisers’ communication directly impacted their confidence in a financial plan, their likelihood of retaining the adviser, and their willingness to refer the adviser to family and friends (2019). And all of these factors directly affect an adviser’s long-term success!
So, in the spirit of helping next-gen advisers think carefully about some of their communication strategies, here are a few “dos” and “don’ts” to help you succeed.
Dos
1. Do set communication expectations with your clients early on. If clients know when you’ll reply to their email or when you’ll call them back, they probably won’t worry. But advisers often use generic phrases like “we offer outstanding service” without clarifying what that really means. What can you commit to? If you will return all phone calls within four hours or by the end of the day, say that. If you answer emails within 24 hours, let them know.
Additionally, tell clients how to signify urgent items and let them know how you’ll communicate in the event of a big shift in the markets or a natural disaster. It can save you a lot of time down the road if clients know to expect an email should the market move by 1,000 points in a day, for example.
2. Do be clear about your value proposition. You don’t have to be an expert on everything, and it’s probably best not to try. But you need to ensure that your clients know you have their best interests at heart and have access to the best solutions for their unique needs, even if it calls for expertise outside of your scope.
There can be a reluctance to offer services in areas where advisers don’t feel equipped. Spectrem Group research states that nearly 91 percent of clients say they want estate planning advice from an adviser, but only 22 percent receive it (2022). If you don’t feel confident in a specific area, it’s perfectly OK to tell clients you’ll bring in experts when needed or that you will work with a wide range of specialists to meet their needs.
3. Do try to engage your clients’ direct heirs. More than likely, your clients’ children will inherit the assets one day, and they will likely have jobs and careers that will make them good clients on their own. You can ask clients to introduce you to the children who will serve as executors or healthcare proxies, invite them to client events or webinars, or engage with them on social media.
With clients undoubtedly saying nice things about your services, it should be easy to make yourself known to their children. And getting to know the next generation of clients should be part of any communication plan you develop.
Don’ts
4. Don’t communicate haphazardly. A best practice is to develop a communications plan and stick to it. Consider all the mediums at hand, and make sure you meet clients where they want to meet you. These options include regular emails or video updates, LinkedIn, Facebook, Instagram, and other platforms like newsletters, blogs, and podcasts.
Carefully consider the frequency of your communications, too. YCharts research states that approximately 88 percent of people said that an adviser’s frequency and communication style are factors in recommending their services to a family member or friend (2019).
5. Don’t overlook the obvious. Starting a podcast or blog can be a lot more interesting than other mediums, and they have a lot of value. But don’t focus on something new and shiny and neglect the tried-and-true basics everyone uses. For example, is your staff trained to answer phones properly? Since most clients need to call your office, you should spend time and energy ensuring that team members know how to represent your firm. I once called an adviser only to have a staffer tell me that he was in the bathroom and would call me back later. The adviser was mortified to learn this, and it’s clearly not the service standard most people want.
The same thing goes for your email communications. How often do you communicate with clients? What do you send out, and when do clients need to hear from you? These basics should comprise the backbone of your communications plan.
6. Don’t think of your client as only one person. Even if you only meet with one person regularly, remember to include spouses and children and arrange your review meetings and client events to appeal to them. You should know the spouses’ names, occupations, interests, and hobbies as well as those of your primary clients.
And mind the gender gap! According to Fidelity Institutional Insights research, only 46 percent of advisers say they successfully partner with women clients to retain them through a wealth transition (2022). This statistic indicates that there are some significant breakdowns in communication at play. Advisers may show a lack of respect and attention to their women clients, which could prompt these clients to leave the adviser when their spouse passes.
Plan to Get Personal
As a next-gen adviser, strategically communicating with your clients is essential, and it can make a huge difference in your ability to attract prospects, too. By all means, master portfolio construction. But first, make sure that you develop and execute a solid communication plan for your business.
References
- YCharts. 2019, December. “How Can Advisors Better Communicate with Clients?” https://go.ycharts.com/hubfs/YCharts_Client_Communications_Survey.pdf.
- Spectrem Group. “Focus on What Investors Want.” Archived May 20, 2022, at the Wayback Machine. https://web.archive.org/web/20220520224137/https://spectrem.com/Content/focus-on-what-investors-want.aspx.
- Fidelity Institutional Insights. 2022. “The Advisor and the Decade of Generational Wealth.” https://institutional.fidelity.com/app/proxy/content?literatureURL=/9903919.PDF.