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.horsesmouth.com/public/freetrial/ftjoin.aspx

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.