How Client Feedback Drove Dramatic Gains in One Advisor’s Business

Wednesday, October 5th, 2011

How client feed­back drove dra­matic gains in one advisor’s business

Many advi­sors have heard about the ben­e­fits of a Client Advi­sory Board. Today, an advi­sor who leads a six per­son team dis­cusses how her very first meet­ing yielded star­tling insights on every­thing from the most effec­tive form of com­mu­ni­ca­tion to port­fo­lio reviews to how to encour­age referrals.

Note that this advi­sor recruited the mem­bers of her board by post­ing a notice in her newslet­ter invit­ing clients inter­ested in par­tic­i­pat­ing to let her know, and then sup­ple­mented this by approach­ing a few clients directly.

This arti­cle orig­i­nally appeared in Hors­es­mouth, the lead­ing advi­sor prac­tice man­age­ment site. Any­one inter­ested can get a 45 day free trial to Hors­es­mouth here:

http://​www​.hors​es​mouth​.com/​p​u​b​l​i​c​/​f​r​e​e​t​r​i​a​l​/​f​t​j​o​i​n​.​a​spx

By: Debra Tay­lor, CPA/PFS

I am con­stantly striv­ing to fol­low best prac­tices and become more effi­cient as my firm and I grow. Fol­low­ing best prac­tices, we recently held our first Client Advi­sory Board (CAB) meet­ing. Although it is too soon to say for cer­tain, I think it may be the best $500 I have ever spent on my clients. (In fact, I didn’t even spend it, as one of my local ven­dors was more than happy to foot the bill.)

I expected the CAB to serve as a way for me to be more in tune with my clients’ wants and needs so that I could bet­ter serve them, but it is turn­ing out to be much more than that. I now have eight action items on my plate, plus the knowl­edge that my clients have a vested inter­est mak­ing our firm stronger.

The mechan­ics

We held the CAB meet­ing in a pri­vate room at our local coun­try club and had eight clients in atten­dance. We met for about two hours and fol­lowed the agenda below, which was pre­sented to each client.

I was wor­ried that my clients would be reluc­tant to share with me, espe­cially those things that my staff and I could be doing bet­ter. To address this con­cern, I invited my most out­spo­ken client, a for­mer col­lege pro­fes­sor, to act as the cat­a­lyst for open communication.

Dur­ing the early part of the meet­ing, we talked about the acces­si­bil­ity of my staff and the open­ness and trans­parency of our processes and fees. I received 10 min­utes of pos­i­tive responses, which made me a lit­tle ner­vous; wor­ried that my CAB meet­ing was turn­ing into a love fest and no action­able items would come out of it. So I baited my out­spo­ken client, men­tion­ing a trans­fer that was not prop­erly processed in his account; then the con­dor started to surface.

Broker-dealer

We started to talk about the rela­tion­ship with my broker-dealer. Many of our clients were actu­ally unaware of the rela­tion­ship, and we ded­i­cated a con­sid­er­able amount of time dis­cussing my broker-dealer’s cus­to­dial and com­pli­ance roles.

I believe my clients found the expla­na­tions to be reas­sur­ing. It also puts me at ease to know that should I take the next step in going RIA, I would have a loyal fol­low­ing among my clients and not lose a sig­nif­i­cant por­tion of them. If noth­ing else comes from a CAB, the renewed faith and boosts in con­fi­dence you get from hear­ing your clients praise and appre­ci­ate your work is def­i­nitely valuable!

Action item

1. Explain our rela­tion­ship with our broker-dealer to our clients so they gain a bet­ter under­stand­ing of the benefits.

Our newslet­ter

Our firm sends out a newslet­ter called The Week­ender every Fri­day. It is our main dis­tri­b­u­tion chan­nel for dis­sem­i­nat­ing infor­ma­tion to clients and prospects on a mass scale.

We have used The Week­ender to dis­trib­ute our weekly mar­ket com­men­tary and to stay top-of-mind on a reg­u­lar basis. As it turns out, our clients were eager to learn more about their invest­ments, learn more about the mar­kets, and have a more per­sonal rela­tion­ship with the firm.

As a result of CAB input, we have made rad­i­cal changes to The Week­ender. We now include a “Did You Know?” col­umn that high­lights a dif­fer­ent invest­ment topic every week, a “Per­sonal Finance Cor­ner” that high­lights a dif­fer­ent per­sonal finance piece every week (whether it be accel­er­at­ing your mort­gage pay­ments or high­light­ing credit card rewards pro­grams), and a “From Where I Sit,” col­umn, which is writ­ten with a more inti­mate tone and allows me to con­nect with my clients on a per­sonal level.

Action items (cont’d)

2. Con­tinue to build on the suc­cess of The Week­ender

3. Cre­ate other mean­ing­ful ways to con­nect with clients on a more per­sonal level

Port­fo­lio reviews

We have a very thor­ough process for port­fo­lio review meet­ing with our clients, whether they are quar­terly, semi-annually, or annu­ally. We start with a mem­ber of our team review­ing the accounts and their per­for­mance with the client. I then dis­cuss any changes that we are rec­om­mend­ing and any new strate­gies or man­agers we should be con­sid­er­ing. We then dis­cuss any changes in the client’s needs and fol­low up by answer­ing any ques­tions they may raise.

Fol­low­ing best prac­tices, we sched­ule our next appoint­ment before the client leaves, and within 48 hours, a mem­ber of our team sends notes that sum­ma­rize the meet­ing and out­line any action items to be done by our­selves or our clients.

As it turns out, the CAB reported that meet­ing notes are quite valu­able to the clients, and they appre­ci­ate that we put our promises for action items in writ­ing; thus hold­ing our­selves account­able. Although the clients asked that we be less thor­ough and spe­cific about the invest­ments in their port­fo­lios and focus more on the over­all per­for­mance, this is one time I think I will err on the side of com­pli­ance and caution.

Action items (cont’d)

4. Be more to the point in port­fo­lio reviews

5. Put more empha­sis on the deliv­ery of meet­ing notes

Client events

We closed by dis­cussing client events and sem­i­nars. We learned that our clients wanted more “lunch and learn sem­i­nars” and more client appre­ci­a­tion events. We will still hold our fun events, although we have now sched­uled a “lunch and learn” every six weeks for the rest of the year.

Our clients expressed inter­est in learn­ing more about their options when it comes to Social Secu­rity, tran­si­tion­ing to retire­ment, estate plan­ning, tax plan­ning, and mar­ket con­di­tions. Not only will these lunch and learns help strengthen my rela­tion­ships with my clients, but they will help me strengthen my rela­tion­ships with indus­try pro­fes­sion­als and cen­ters of influ­ence. I will invite an estate plan­ning accoun­tant and attor­ney to con­duct these sem­i­nars and hope­fully strengthen them as refer­ral sources.

Action items

6. Pro­vide more edu­ca­tional events, such as monthly sem­i­nar top­ics and speakers

7. Offer more oppor­tu­ni­ties to spend social time with my clients

Refer­rals

Although many advi­sors hold Client Advi­sory Board meet­ings as part of their refer­ral mar­ket­ing, I have always strug­gled with ask­ing my clients for refer­rals; although I do. How­ever, I was very sur­prised and found it most inter­est­ing that my clients did not wait for me to dis­cuss this topic; they raised it on their own!

One of my clients said they have been so impressed with our firm and the way that we man­age their invest­ments that they have been mean­ing to refer their friends and fam­ily to us, but haven’t had the oppor­tu­nity or venue to do so. They wanted to bring their friends and fam­ily mem­bers to a lunch or some other client events in order to make an intro­duc­tion and actu­ally show them first­hand what our firm is all about, rather than just rec­om­mend­ing our services.

Wow! That was an amaz­ing insight. With the help of these clients, I will be able to grow my prac­tice even faster than I could have ever imagined.

Action items (cont’d)

8. Hold “bring a friend” events specif­i­cally designed and mar­keted for clients to intro­duce oth­ers to the firm.

Your clients are your life­line, and you should be should lis­ten­ing to them. I have always believed that if you do right by your clients, lis­ten to their needs and desires, and do every­thing in your power to pro­vide them a supe­rior client expe­ri­ence, it will pay div­i­dends. Our Client Advi­sory Board expe­ri­ence has just rein­forced this belief for our firm.

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Tags: Advisory Board, Aspx, Attendance, Best Practices, Board Meeting Agenda, Client Feedback, Cpa, Debra Taylor, Dramatic Gains, First Meeting, Free Trial, Local Country, Mechanics, Person Team, Portfolio Reviews, Practice Management, Private Room, Referrals, Startling Insights, Vested Interest
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