Journal of Financial Planning: June 2022
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Financial planning firm owners are confident that they deliver exceptional service. However, they become so bogged down in the details of working in their business that they forget to work on the business.
One quick win for firm owners to tackle is outlining their client service model and structuring it in a way that serves both themselves and their clients. By understanding what your clients need from you and how you want to engage within your business, you can set up a business model that leaves everyone happy with your services.
Selecting Your Firm’s Core Service Offerings
Once you have clarity on the needs of your clients and how you add value to your current client relationships, you can start to outline your firm’s services. In general, adviser services fall into one of three buckets:
- Planning only
- Investment management only
- A combination of planning and investment management
You may offer just one of these services, or your firm might have all three available for new clients. Whatever the case may be, consider which benefits each level of service encompasses. This should highlight both the ideal client type for each of your services and how the service model or calendar can appropriately address their needs.
Capture Your Value Proposition
Now that you’re clear on what services you offer, you can leverage this information to clearly communicate your value.
Many advisers struggle with capturing their value and deciding on a service model that plays to their strengths and serves their clients well. In general, you can start listing your firm’s value, or the benefits of each of your services, by focusing on the following:
- Key expertise. What knowledge and experience does your team have to offer that sets you apart? Do you offer strategic planning, or do you have specific professionals in your stable of colleagues and centers of influence who can add value to your client’s plan?
- How clients feel. Do clients feel empowered when working with you? Peace of mind? Capture the non-tangible value you bring to the table by putting their feelings into words.
- Return on investment. How do you earn your financial value? This could be as simple as the fact that you save your clients time. It could be that you coordinate their financial planning team and manage their money in a more expert and efficient way than they could on their own.
Prospective clients, will be attracted to your firm at any level because they’re equally excited about your unique value and approach.
If you’re having a hard time getting clarity around what areas of your service make the biggest impact on your clients, start here: Make a list of the top four or five ways your firm adds value to the lives of your clients based on the categories above. Then, make a list of four or five elements of your current planning process that you know you can execute exceptionally. Where is there overlap? This is likely where your value lies.
Clarifying Client Attributes
Next, think through your book of business. Ultimately, your clients and their needs should drive your service model. Once you’re clear on what they require from your firm, and what they want out of an adviser relationship, you can create a service calendar that works for your current clients and matches your firm’s growth goals.
Client attributes are so much more than just what your “niche” is. Saying you work with physicians isn’t specific enough to help you build a scalable service model. Ask yourself the following questions to clarify who your clients are and what they need from your firm:
- Does my firm work with a clear niche market?
- What age bracket do my clients fall into?
- What pain points are they facing?
- Are they delegators, or do they prefer a collaborative approach?
- Will my clients expect to hear from me once a year? More often?
- What questions do my clients consistently have that I can proactively answer?
You will likely find that you have both quantitative and qualitative client attributes for each tier of your service. Leverage each of these to help understand what clients in each level of your service offering need from you, and how you can better serve them.
Components of Each Level of Service
Once you understand your core service models and what clients need from your firm, you’re able to outline what each service contains in more detail. In general, the following areas of expertise are included in some, if not all, levels of service.
Financial planning topics. This could include the basics of cash flow management, all the way up to more complex tax and estate planning. Carefully consider what topics you cover in each of your levels of service based on your client attributes.
Account servicing. From managing and opening client accounts to scheduling planning meetings, some level of account servicing happens within each level of your service model.
Technology access. Different types of services will require different technology tools. For example, one-time planning clients may only need access to a secure file upload tool and their final financial plan. Ongoing wealth management clients may need a more robust client resource center.
Outsourced solutions. Do you work with a paraplanner? Have an investment management team that plugs into your firm? List which outsourced providers touch different levels of your service model.
Coordinating with other professionals. This would include professionals such as CPAs, estate planning attorneys, or other financial professionals on your client’s team. You likely only offer this to ongoing clients.
Implementation and monitoring. There are different levels of monitoring depending on the type of work you do for each client. For example, you may only send check-in emails to one-time planning clients periodically but perform ongoing implementation and reporting for wealth management clients.
Build In ‘Wow’ Factors
As the number of financial planners in America steadily increases, competition in your niche market may be getting tough. Although many financial advisers focus on providing exceptional service to their clients, they often don’t think that “wow” factors are necessary.
The truth is that these “wow” factors can make or break a client relationship. If you want your firm to maintain exceptional client relationships and become a referral machine, ensuring that your core service model is running smoothly is only the first step. The second step is to add thoughtful extras to create meaningful relationships with your clients and to show appreciation and an investment in their lives.
“Wow” factors don’t have to be fancy. I encourage clients to focus on five key areas of their firm to level up and add a “wow” factor for their book of business.
- Presentation. Organize and brand your deliverables to ensure your brand is recognizable, clean, and accessible to clients.
- Personalized experience. How are you personalizing your client experience? This could be small touches such as a birthday gift or holiday card, or it could be larger personalizations like developing a scalable communication and education strategy as your business grows.
- Consistency. How consistent is your service model? If a firm owner is primarily in charge of executing each area of their service model, the likelihood that things are being missed is high. Take an honest look at your services to find where inconsistencies pop up.
- Follow-through. Is your team following up with clients on tasks and deliverables? Do clients know that the “to-do list” is being accomplished? Consider whether you are actually following through consistently and how you communicate this for a transparent practice.
- Technology. Depending on the needs of your clients, you may find you need different technology and tools to level up their experience. For example, investing in specific planning software for business owners, college planning, or multigeneration families may be critical to help ensure your services are being valued and leveraged by the appropriate client type.
Team Members and Solutions Required
Who is making sure your consistent client experience is happening? I usually recommend that the firm owner or founder not be the sole person responsible for implementing every area of the business. Take this opportunity to audit your service model and come up with a delegation plan for these three key areas:
- Advice and expertise
- Operations
- Administration
You may find you already have the team in place to take on the responsibilities you need to execute an exceptional service model, or you may find yourself in a position where hiring is necessary.
The ‘Why’ Behind Outlining Your Service Model
Many firm owners who I speak with are confused about why they need to go through this process. For many advisers, a service model feels like a natural, plug-and-play routine. They’ve been serving their clients for years (sometimes for decades) and assume that things are running smoothly.
Unfortunately, this is often not the case. When there isn’t clarity around what exactly is included in each level of service a firm offers, trouble is usually right around the corner.
A best-case scenario is that, due to lack of clarity, the firm owner is getting bogged down in unnecessary tasks and feels overwhelmed by the constant juggling of all the tasks on their to-do list. The worst-case scenario is that there are notable inefficiencies that are reducing the scalability of the firm and that client tasks are slipping through the cracks—resulting in stressed-out employees, frustrated firm owners, and unhappy clients.
This is why it’s critical to go through this process as soon as you can and to audit your service models regularly. Any time you’re noticing that client work seems to feel rushed or like there isn’t a clear delegation plan for client tasks, it’s time to revisit your service model outline.
