Advisers need to act on client communication plans

Important ingredients are regular feedback and inclusion of family members in outreach

Jul 9, 2014 @ 3:47 pm

By Minda Smiley

Financial advisers are making strides when it comes to client communication, but some still need to do more to ensure long-term success and profit from those efforts.

Communication is a two-way street, but while 68% of advisers say they gather client feedback in some way, informal feedback is the primary method, according to the 2014 Trends in Client Communication Study released Wednesday by the Financial Planning Association Research and Practice Institute. The study included input from 411 advisers.

Female advisers and advisers under 40 are more likely to gather feedback (77%) compared to male advisers (65%).

“The reality is that an adviser can have a great client communications plan but if it is not formalized and communicated, the value is significantly reduced,” said Julie Littlechild, CEO of Advisor Impact and a member of the survey team.

More than half of advisers have formally defined service standards established for clients, such as response time and frequency of contact. A gender difference is noticeable here as well: 66% of female advisers said they define service standards for clients, whereas 53% of male advisers do.

While nearly one-third of advisers said they review and reinforce service standards with clients regularly, 44% said they communicate standards only when they begin working with a new client.

“The financial services industry is incredibly competitive,” said Lauren Schadle, FPA executive director and CEO. “Advisers who are not differentiating themselves in their client communications are not reinforcing their value proposition with existing clients and, unfortunately, with their clients' spouses and children.”

The survey backs up that lack of family inclusion in many cases. Nearly 20% of advisers said fewer than half of their married clients meet as a couple and 48% said fewer than three-quarters do. And only 34% said they are working to build relationships with children of existing clients.

“Baby boomers and retirees are target clients for many advisers,” said Valerie Porter, director of the FPA Research and Practice Institute. “To offset client and asset attrition inherent in that group, advisers would be wise to build relationships with that group's survivors, and to diversify their practices with younger clients to ensure the long-term viability of their businesses.”

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