Solidify client relationships in volatile times by overcommunicating

Demonstrating your thoughtful approach to areas of investor concern — and the steps you're taking to address them — will pay dividends in trust and client retention

Aug 6, 2018 @ 11:11 am

By Michael Kim

After the historically low levels of volatility seen in 2017, many investors became accustomed to a lack of bumps in the market. However, the type of predictability simply has not held true so far in 2018.

In the current market environment, it's critical that advisers proactively address investors' concerns about volatility and set the expectation that highs and lows are an inherent part of the natural cycle despite last year's performance. Doing so will not only calibrate investors' short-term expectations about the nature of the market, but also help establish strong adviser-client relationships in the long run.

Building this level of trust won't happen overnight — it requires a commitment to thoughtful and continuous client conversations, perhaps even overcommunication. Read on for a checklist of tangible strategies you can adopt to begin building solid adviser-client relationships through frequent communication during these volatile times and beyond.

1. Provide constant context

Taking the time to provide investors with constant context about natural market movements pays off when the financial climate is demonstrating more significant up and downs. Don't wait for the next scheduled in-person meeting to begin laying the groundwork for these conversations. More and more, clients are looking to communicate with their advisers on the fly, using resources like Skype, Join.me and FaceTime. This type of nontraditional communication gives advisers the opportunity to share their brief, simple perspective on what's happening in the market at any given moment, bringing clients into the conversation and educating them in real time.

(More: Is it better to meet with clients in person or online?)

2. Personalize client interactions

Take these interactions a step further by using personalization. Helping clients understand significant market movements is a great first step, but tailoring the conversation to explain how a current development will specifically impact a client's unique goals and financial strategies is even more valuable when it comes to demonstrating expertise and building relationships. Make sure all notes and communications about the market highlight the relevance to an investor's personal objectives.

3. Leverage forecasting technology

Technology can be leveraged as a communication tool to provide nuance for clients on market activity as it happens — and sometimes, even before it happens. For example, advisers can use intuitive, visual technologies that allow a real-time modeled demonstration of how financial strategies have fared in various market environments. Setting advance expectations through conversations framed around modeling tools is a critical tactic that can positively contribute to investor education and long-term retention over the course of many market cycles.

4. Embrace the next generation

Utilizing a wide range of dynamic technologies and communication methods also provides an opportunity for advisers to connect and begin setting expectations about volatility with the next generation of clients, which often includes the children of current investors. Research suggests that this generation of investors responds to frequent, effective communication. Advisers who structure their communication strategies in a way that includes and resonates with this demographic will be best positioned for intergenerational success. It can also be helpful to involve junior advisers in this process to bring clients' children into the conversation naturally — a worthwhile strategy considering that younger generations stand to inherit an estimated $30 trillion in assets in the coming decades.

(More: Creating an authentic relationship with a client's entire family)

View frequent communication as a natural opportunity to let your value proposition shine and demonstrate the level of service and care that you provide to your clients. Whether it is your ability to provide top-rate market insight, thoughtful financial plan adjustments, or new and creative investing concepts, the more you're in contact with your clients, the more they'll be able to articulate exactly why they value your expertise and service — and perhaps share this appreciation with friends and relatives who may be looking for an adviser.

The end result of effective overcommunication is client confidence. Demonstrating your thoughtful approach to areas of investor concern — and the steps you're taking to address them proactively — will pay dividends in trust and long-term client retention. Advisers who can continuously address investors' concerns through strategic communication will have the strong relationships needed to help their clients achieve their long-term goals, regardless of how the market is performing.

(More: How to access the high-net-worth space)

Michael Kim is executive vice president and chief client officer at AssetMark Inc., an SEC-registered investment adviser.


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