By Beverly D. Flaxington
Let's face it-communication is something advisers struggle with even during good times. They wonder, "How much should I communicate with my clients? What's enough and what's too much? What should I say? What should I do to ensure accurate communication flows both ways?"
And that is when markets are generally up and investors are, on balance, happy about their portfolios. Now, advisers are dealing with an unpredictable market, decimated portfolio accounts, clients with lost hopes and dreams and a very frustrated base of investors wondering, "What did I pay my adviser for last year, anyway?"
Effective communication rises to the top of the pile of urgent matters to address in 2009 and beyond. If you've struggled with communication, now is the time to get better at it. If you think you communicate well but would like to improve, now is the time to sharpen your skills.
Is there a more overused, misunderstood word in the English language than "communication"? Fundamentally, it's simply a transfer of information-data passing from one medium or another to a receiver. The problem is that this doesn't define "good communication" or the type of communication that your clients seek during these tumultuous times.
Clients have a need for education and information, particularly as it pertains to their personal situations. Any adviser who is not making every effort to reach out and communicate with clients in the current market is vulnerable.
It isn't enough to just call a client. In fact, sometimes calling to say, "So, are you worried about your portfolio?" or, "How are we doing right now? Are you happy, or unhappy?" is the worst thing you can do. Simply trying to confirm that your clients are happy won't get you what you need in this market, or any other.
What does effective client communication look like? Here are six ways to improve your stature with clients as a good communicator:
1) Provide information that is useful and meaningful to your clients. For example, the generic newsletter with information on the upcoming Roth IRA changes is fine for a portion of your communication, but what clients really want to know is, "How does this impact me?" Here are a few ideas:
- If you have a number of small business owners as clients, provide an e-mail with information about a specific tax law change that affects them.
- If a number of your clients are women who are widowed or alone, provide a letter with news of a program or club they may be interested in geared toward investing.
- Do you have clients with grandchildren? Are they hoping to send those grandchildren to college? Provide 529-specific information they can act on.
Taking the time to be targeted in your approach is not nearly as difficult as finding new clients.
2) Offer a menu of communication choices. At a minimum you need the requisite newsletter, but how about targeted educational workshops, focus groups, monthly calls from an adviser or weekly e-mail updates on current topics? Provide as many choices as you can in a variety of formats to show the clients you value meaningful communication.
Then, ask clients to select their menu preferences. Not everyone likes communication delivered in the same way. When a client initially joins the firm (and annually thereafter) ask them to choose communication options from your menu. Let them pick the things that matter to them, and then have your staff segregate your client base according to desired communication.
3) Survey clients carefully. Don't just send a written survey to ascertain your clients' happiness level. Have someone in your firm, or an outside firm, develop a set of questions to elicit your clients' estimation of how you are doing on a number of different fronts. If you can afford the time, resources and money, a qualitative survey where clients are contacted by phone can be invaluable. Don't make the mistake of surveying without providing feedback and follow-up. (For more information on client loyalty and satisfaction surveys, see "How Problems Affect Client Loyalty" on page 18.)
4) Re-sell your capabilities and value proposition. Yes, clients probably knew when they joined the firm why they selected you versus another adviser, but guess what-they've forgotten. Or, they know only a certain piece of information about your firm; not everything you do and can offer.
Provide an updated, electronic marketing piece with an e-mail cover letter to talk about what you do. Or, when you hold the next client appreciation dinner, spend some presentation time re-introducing clients to your firm. This serves two purposes; it reminds existing clients of the value in working with you, and it provides nuggets of information for clients to pass along to referrals.
5) Emphasize education. Generally people are hungry for information and education so they can make sense of what's going on. Do you have a particular view on the markets or an investing approach that's interesting? Are you aware of any tax law or political changes that could impact your clients? Do you know about generational issues and what can impact a family transferring wealth? Have you had experience with clients in retirement and what issues they were unprepared to deal with? Put your knowledge to work for your clients. Deliver this in a variety of mediums-workshops, webinars, audio CDs and written materials.
6) Spruce up your style and approach. Recognize where you are strong and where you need to improve when it comes to communication. Do you talk fast and need to learn to slow down? Do you know your stuff, but have a hard time projecting confidence and a calm, in-charge style? Consider working with a coach to learn more about your own style and how you come across when communicating. Even if you have the best information to share, if you don't project it in a meaningful, understandable way, the message will get lost.
Will these things take effort on your part? Yes. But client communication is an area that hampers many advisers from accomplishing great things. Excellent communication is at the core of any good relationship, and good client relationships are the backbone of a successful advisory firm. Take the time in 2009 and beyond to separate yourself from the pack and become a good communicator. It's worth every step you will take.
Beverly D. Flaxington is principal of Advisors Trusted Advisor, a division of The Collaborative. She is the author of Understanding Other People: The Five Secrets of Human Behavior and Finding Answers: 52 Tips Wealth Managers & Advisors Need to Grow Their Business in All Markets, both published by ATA Press.