Finding the best ways to stay in contact

Feb 3, 2013 @ 12:01 am

By Liz Skinner

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When it comes to communicating with clients, some financial advisers think that more is definitely better.

In fact, in a 2011 survey, “elite” advisers — those making more than $1 million a year — said that they reached out to their top 20 clients an average of 28 times a year.

Lower-earning advisers didn't come close to that average, according to the survey, which was conducted by CEG Worldwide LLC.

As important as frequent communication is, experts say hitting high numbers alone isn't enough.

Just as important as frequency is finding the right method and style to communicate with clients, based on their preferences.

“It's not possible to create a one-size-fits-all strategy for communication with clients,” said Deanna Sharpe, associate professor in the personal-finance-planning department in the College of Human Environmental Sciences at the University of Missouri.

Advisers have to know their clients and whether they are “high touch” or “low touch” in terms of the amount and type of contacts each will need in a given year.

“Such differences cannot be captured in a formula that says, "Touch clients X amount of times per year in Y ways,'” Ms. Sharpe said.

One point everyone agrees on is that a lack of communication can be a deal breaker for a client. An InvestmentNews survey of advisers late last year found that 30% of respondents had lost clients because of poor communication. Relocation was the only reason that caused more client loss.

Ask clients how often they want to be contacted, and the answers will vary.

According to a Spectrem Group survey in 2011, about 50% of wealthy investors said they wanted to be contacted by their adviser monthly, 27% said semiannually, 12% said weekly and 8% said they would prefer to initiate all contact.


The best strategy for client communications requires that advisers know their clients well and engage them in a mix of investment-related and personal or emotional ex-changes through phone calls, personal meetings, e-mails and events.

“It's very important to understand the recipient of your communication so you tailor your messages sincerely,” said Kevin Cullen, director of practice management at Loring Ward, a portfolio management firm. “Anything you send that reflects your knowledge of them is a good thing.”

Over 24 years, financial adviser Gail Linn of MetLife Financial Group has developed a communications strategy that includes e-mail cards for all holidays — even the Fourth of July.

Ms. Linn also e-mails articles of interest or newsletters, sends quarterly mailings about economics and investments, and handwrites postcards to top clients when she travels to a conference for top advisers.

“You don't want clients to just think of you as selling something to them,” Ms. Linn said. “You want them to think of you as being able to help them in many aspects of their lives.”

Mr. Cullen recommends that advisers create formal plans for reaching out to top clients who are responsible for the bulk of their firm's assets under management. Most customer relationship management systems can be loaded to automatically produce birthday and other personal greetings, various newsletters or other adviser-created content.

But more important than hitting a certain number of touches is to make sure that number is right for a particular client, Mr. Cullen said.

For example, some clients revel in the receipt of a friendly e-mail or note twice a week from their adviser, while others would run screaming, he said.


Adviser Jeff Helms of First Coast Financial Advisors LLC said that client communications for him isn't just about retention.

He uses it as a way to shape and modify client behavior.

For instance, in his monthly e-mail commentaries, he offers stories and uses analogies to reinforce the idea that short-term issues in the economy or markets don't matter over the long term, which is how he wants his clients to think.

“It helps them think about what they need to accomplish over the next 30 years,” Mr. Helms said.

The strategy has paid off for him. During the market meltdown in 2008 and 2009, his clients didn't panic, unlike some of his colleagues' clients.

One of those clients actually called and pleaded, “"I don't care if it's the right thing, but just do something,'” Mr. Helms said.

He said the number of personal contacts versus e-mail notes he sends out varies by the person, and he asks clients what they prefer.

Taking the time upfront to learn about a client and creating sincere communications are two strategies that will pay off, Mr. Cullen said.

“All you have as an adviser is your reputation, and by communicating the wrong way, like by sending out a stock message that any sophisticated investor knows you didn't create, you risk that,” he said. Twitter: @skinnerliz


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