By Jim Komoszewski
As the markets continue to slide and investors watch their retirement accounts erode, you are probably worried about how your clients are coping with the volatility. You may be surprised to learn that the top complaint from financial planning clients is not poor investment performance, but lack of communication from their adviser. So while you focus your attention on gains and losses (which is clearly very important), there's a good chance your clients are simply waiting to hear from you.
The majority of financial advisers have no communication plan of any kind in place, even though it is arguably the most important component of an adviser's overall business. In difficult times like these, it is absolutely critical for advisers to be proactive and take control of the situation. Without a structured communication plan, it is virtually impossible to maintain consistent contact with clients.
With everything else you have to manage in your practice, the thought of undertaking something as complex and time-consuming as creating a communication plan is obviously intimidating. The good news is that it doesn't have to be complicated or take weeks to accomplish. By following a few simple guidelines, you can build an effective client communication plan with minimal effort.
Establish a client segmentation process. You have likely already performed a similar exercise, at least informally, by placing your clients in various "tiers" according to account size. Grouping your clients in this manner is a good start, but you will want to consider other factors when segmenting your book for a communication plan.
For example, the type of investments a client holds might dictate how often that client should be contacted. Retirement time horizon is another important factor, since clients very near retirement will need more attention than those with 15 or 20 years to recover losses. Also take into account each client's personal preferences for how often and in what context they expect to be contacted.
Determine how to delegate tasks. The best way to keep a communication plan running smoothly is to determine ways for your staff to help you execute it. Create a spreadsheet that indicates who has ownership of each contact. For example, an administrative assistant is responsible for mailing cards and handling some routine follow-up calls, while you make proactive outgoing calls. An assistant can also format and edit the content you develop for a client newsletter.
It's important to indicate which tasks need to be completed daily, weekly, monthly or annually. By establishing specific timeframes for each activity, your staff members will know exactly what needs to be accomplished when they arrive at the office each morning. Setting a master schedule will also ensure consistency in your communications and keep things from slipping through the cracks.
Go beyond phone calls. In order to maximize contact with clients, you will need to devise other ways to communicate with them. Sending birthday or anniversary cards is always a nice touch, but distributing a newsletter that contains educational information and resources your clients can use provides real value. It needn't be a dense volume of material-a simple one-page article that can be mailed or sent electronically is often the most effective format.
When sending cards and letters to clients, take the extra time to make sure they are personalized with your signature. The last thing you want is for clients to feel like they are getting a form letter. Also pay close attention to the timing of these communications. Put cards in the mail several days before a client's birthday or anniversary to make sure they arrive on time. It seems simple, but this small detail to can go a long way to ensuring the success of your client communication efforts.
Embrace technology to automate your communication plan. The latest breed of contact management systems is robust enough to let you delegate tasks, set reminders and keep detailed contact history records. Taking advantage of these systems can help you create a fully automated communication plan that runs like a well-oiled machine.
Make the call before a problem arises. If you wait for an issue to arise before you pick up the phone, you fall into the trap of being reactive instead of proactive. Your clients do not want to have to call you first, and you don't want to get surprise calls from frustrated clients. It is your job to stay in front of those calls, anticipate your clients' concerns and let them know you are already doing everything you can to help them. There are a number of thoughtful, proactive reasons to make contact with clients. For example, you might call to provide an investment update or offer your insight on recent market activity.
Expand your plan beyond existing clients. Now is the ideal time to prospect for new relationships, when other advisers are running and hiding. There are plenty of clients who are not getting the attention they deserve. They are seeking proactive advisers who are not afraid to answer difficult questions. You can put yourself in a prime position to capture these clients and establish lifelong relationships by reaching out to them now.
Right now is also the absolute best time to ask your existing clients for referrals. If you are maintaining consistent communication and responding to your clients' concerns, they will recommend you to their family and friends. If you are being proactive and putting in the extra effort to guide them through these difficult times, chances are they will spread the word without you even having to ask. Do not let this opportunity pass you by-the advisers who are there when their clients need them most are the ones who achieve the greatest level of success in the long run.
Building a communication plan is not the overwhelming task it seems to be. By putting just a couple of strategies into practice now, you can establish the foundation of a plan that you will continue to fine-tune over time. The important thing is to keep your communications consistent, reliable and, above all, proactive. A solid communication plan will ultimately save you considerable time and effort. More importantly, it could help you save valuable client relationships and attract new clients who want something more from their adviser.
Jim Komoszewski is vice president and strategic business consultant at National Planning Corporation (NPC), a full-service broker-dealer serving independent financial advisers nationwide.
