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4 Client Techniques for Maximum Engagement

By ClientWise | January 28, 2014

2013 was an interesting year for investors’ relationships with financial advisors. A recent survey by Phoenix Marketing reported a significant decline in investor activity in everything from contributing to existing IRAs to opening new accounts. In fact, the only investor activity that did increase between May and June of 2013 was the number of new relationships investors established with financial advisors.


So what does this mean, exactly? Investors are forming relationships with advisors but not necessarily moving their money. The recent upward trend in the economy has increased investor confidence enough to test the waters, but not dive in.


Then again, consider these inspiring stats from recent ClientWise research about investor activity as linked to financial advisors in coaching programs: Over the course of four years of coaching, a solopreneur advisor doubled his assets under management and increased his production by 20-25% annually. In a separate study of a group of 24 top performing advisors from New York, 50% of them increased their net assets by 5 million in under a year of coaching, with 80% of that same group also experiencing positive growth within that time frame.


You might be wondering how they achieved these results in such an environment. They, too, were up against a tough set of circumstances in 2013, but had one key thing in common: They were able to gain perspective through their coaching partnerships enough to recognize an opportune moment within the current economic condition, and shift their client engagement tactics as a result.


These advisors experienced improvement in their practice management across the board, but reported that the real impact was in how they were able to mirror their coaching relationships in their relationships with clients and prospective clients to greatly impact their communication, listen better, and learn more about their clients’ needs as a result.                                                                                                                                 

This is your main point of differentiation as an advisor, and where you can stand out amongst the average 3.21 advisors per investor. Your understanding of your clients’ needs is in direct correlation to their ability to understand your business and the unique value you bring to them as an advisor. Here are a few things to consider:


1. Determine your ideal client: The highest performing financial firms pursue only 3% of opportunities outside their ideal target segment, based on the products and services they offer, and this tactic should apply throughout the firm right down to the individual advisor. A coach will provide the perspective you need to determine that segment by guiding you to focus only on those clients who fit your service model, and pass on those who require too many additional resources due to expectations outside your expertise. Based on a recent ClientWise study, teams who identified an ideal client by minimum account size alone experienced 121% greater assets under management per team member than those who did not.


2. Know your current clients (and their kids and their friends and their friends’ kids): Imagine if you developed a niche so specific that you barely had to move out of a neighborhood or a community to reach your client base. No advisor would ever want to limit him or herself in this way, but the theory is that it allows you an incredibly deep and intimate knowledge of a specific group, and the opportunity to establish communal trust among them, which should come more naturally once you’ve determined your ideal client.


3.  Plan for succession, not just for your firm, but for your clients. The real wealth transfer will begin in 2026 when boomers start moving about $2.5 trillion, but studies show much of this money isn’t being transferred but instead going toward healthcare. And, according to a Rothstein Kass study, the 86% of heirs who are getting money from their parents are switching advisors once they receive it. Avoid this with your clients by bringing up succession planning for heirs early on, and establishing relationships with younger family members from the start.


4.  Establish trust through common-intent: Remind your clients that their goals are your goals. Establish these together and check back on your collective progress toward them frequently. If your clients feels as though they are an equally vital voice in the outcome of their goals, they will feel more comfortable with your decision making process and you’ll likely spend less time in conversation with them. Time is money and the amount of time you spend with a client is inversely proportionate to level of trust they have in your ability.


The key takeaway for 2014 is to keep your client in mind first and foremost. Many advisors claim this is how they operate, but in order to really be client focused you have to almost entirely change your perspective, and this is where coaching comes in. Each client relationship is unique, and no one tactic will ensure success in a particular advisor/client partnership. Coaching will help you develop the communication skills necessary to make each client feel as though they receive unique, specialized treatment from an approach that, to you, is an easily scalable and repeatable process. Apply these tactics in 2014 and you are sure to succeed regardless of investor trends in the marketplace



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Topics: Client Engagement

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