Most Popular ArticlesTurmoil at the Top of the Market
August 4, 2009
Step Two: Start with defense
Identify your top clients - the ones most likely to be approached by competitors. Think about when you last met and consider whether a meeting is overdue.
What happens when you meet is key. In that meeting, you need to provide perspective on what you’ve learned from the events of the past year, a point of view on where we are today and clear guidance on what clients should be doing going forward.
Many clients are looking for a departure from the investment approaches that failed them in the past year and have frequently led to disappointing returns over the past decade. Given that many investors are looking for changes from the status quo, focus on modifications in the strategy you’re recommending. If you’re advising a stay-the-course approach, emphasize why it still makes sense and ensure clients understand the alternatives you’ve considered before arriving at a do-nothing recommendation.
When you meet, make it a priority to dig deep for how clients really feel and focus on hearing them out. This article sets out a five-step process to engage clients you’re meeting with.
And even if you haven’t conducted a formal client survey, consider asking key clients to complete a short report card before the meeting and use that as a jumping off point for your conversation.
Step Three: Make trust your top priority
At one time, trust was given by clients – increasingly today it’s earned.
Recognize that rebuilding client trust is your number one priority – erosion of trust is a cancer that inevitably undermines your relationship.
Research by consultant Charles Green has identified four drivers of trust – credibility, reliability, intimacy and client focus. For strategies on building trust, take a look at his www.trustedadvisor.com website – you can also read more about rebuilding trust here.
Step Four: Tackle perceived conflicts head-on
Investors today are paranoid about conflicts of interest – in many cases the pendulum has swung from indifference about conflicts to fixation on them.
Consider publishing a code of conduct and sharing that with clients; this was an idea put forward earlier this year here by Scott Welch of Maryland-based Fortigent.
And think about being proactive in embracing a “fiduciary approach”, in which you commit to taking the initiative in disclosing potential conflicts and putting client interests first in everything you do. At one time, advisors would have been concerned that talking about a fiduciary approach would create suspicion among clients and raise concerns where none existed; in today’s hyper-vigilant world, we need to pre-empt the concerns that may be weighing on clients but that they aren’t comfortable raising.
Step Five: Shift to offense
No matter how good a job you do, today’s reality is that you will inevitably lose some clients.
You need to put steps in place to replace them. Start by carving out a regular time block in your schedule – say two ninety minute periods each week, during which you focus on one prospecting strategy.
You could use that time to meet with professional advisors of existing clients. Or systematically reach out to people you know, offering to send them the articles you email clients, with the goal of increasing the number of prospective clients in your pipeline.
Alternatively, you could focus on client development via the client sandwich lunch initiative outlined in this article.
Or you could seize on opportunities to position yourself as to the go-to resource for people who face corporate downsizing.
And don’t ignore planting referral seeds when meeting with clients. Here’s a recent article on this topic.
If you’re unsure about how to raise the topic of referrals, try this at the end of a meeting: “In the next twelve months, I have the capacity to take on 10 new clients. I have recently identified the profile of the clients I find I can help the most and work with the best – a profile that you fit almost exactly, by the way. I wonder if I could take two minutes to walk you through the qualities of the clients I work with best, in case you’re talking to a friend who is considering making a change.”
In Summary
The three articles that appeared in the last while and others like them are a wakeup call for advisors. The only question is whether you answer that call or press the snooze button.
If you decide to respond, schedule some time in your calendar right now, perhaps along with your team or colleagues. In that time slot, you might go through this article in detail and pick one or two areas to focus on in the period ahead, clearly defining the steps you need to take in the next 30 days.
Just remember: Advisors are no different than once successful automakers or retailers. Those who embrace fundamental change in response to an altered competitive landscape and shifting customer reality can position themselves for future success. Those who fail to do so risk being left in the dust.
Links to articles:
Business Week – June 25 Thinking of Switching Financial Planners?
Wall Street Journal – July 29 WSJ.com - Wary Investors Are Seeking Out Objective Voices
New York Times – Aug 1 Wealth Matters: In Search of Competent (and Honest) Financial Advisers
* Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written and video commentaries and to reach him, go to www.strategicimperatives.ca.
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