March Week 1: Communicating with clients

IN Practice appears on the web and in IN Daily every Monday. Comments and questions are welcome at IN Editor@InvestmentNews. Listen to Maureen Wilke's introduction to IN Practice INPractice for March: Implementing an Effective Communications Plan The Problem: Successful advisers are those who communicate — a lot. Client satisfaction and retention depend on adviser communication, with study after study finding that wealthy clients expect at least 12 contacts a year. That can be in-person visits, phone calls, e-mails and newsletters. But how do you do it? The Solution: Creating an annual client communications plan that incorporates eight to 12 specific ideas for face-to-face meetings, events or written communications. Complete the following weekly steps, and you’ll have a communications plan in place by the end of March. Weekly steps: Week 1: Identify your top clients. Week 2: Select the plan components. Week 3: Build a communications calendar. Week 4: Roll out the plan to staff and clients. Week 1: Identify your top clients Background: Your top clients — as well as those you peg as up-and-comers — deserve most of your attention as they provide most of your current income and offer the most potential for generating future business. That’s why it makes sense to focus your communications efforts on top clients and ensure that those efforts are organized and optimally targeted. Let’s start by identifying who your top clients are and how you can best communicate with them. What to do: If you haven’t already done so, segment your clients by assets under management. In a fee-based business, AUM is probably the best measurement yardstick — although advisers may argue that it minimizes the importance of younger, less affluent clients who will become more important over time. I suggest that you use the AUM yardstick, but don’t be a fanatic about it. Categorizing clients this year, you’ll find that most of your business comes from relatively few clients. Often, the 80-20 rule applies — 80% of your business comes from 20% of clients. But don’t be surprised if your business is even more concentrated. Among many top advisers, the rule is more like 90-10. Depending on the size of your practice, you may come up with 20 or 30 clients, or maybe even fewer. That’s fine. Next, develop a Top Client Background Chart to facilitate capturing important information (use the attached templates). In this chart you will list your top clients and begin the work of gathering all the information necessary to create a strong communications plan. While your entire team can be involved in collecting the data, there should be only one master version of this chart so that every team member can keep track of the information that still needs to be collected. The chart is the foundation for your internal and external communications, and it will make developing the communications calendar easier in Week 3. If you use a CRM (Client Relationship Management) system, organize a household list by AUM and export the information to the chart. If you don’t have such a system, you can fill in the chart yourself from your own records. Here’s the information you’ll need to gather: - Total investible assets you manage — plus assets held away from you, if possible. - Assets in retirement plans such as 401(k)s, even if you don’t manage those assets. - Whether your client will receive a defined benefit pension and, if so, about how much income that pension will provide. - Value of stock options, if any. - A list of immediate and extended family members, by name. - The client’s top financial goals. - Referrals that the client could make. Example: Bill & Jane Adams (brother of client Sam & Bill’s wife). - Lifestyle interests and financial concerns. This is where you list what’s on your clients’ minds — both in the sense of what they think about for fun positively and what they worry about. For example, if you know that client Mary is an avid gardener or that Max is an avid golfer, list that here. Also note that Mary is concerned about not having enough money to afford her home (and garden) if she is widowed, and that Max is worried about the cost of health care because he might need a hip replacement. When completing the chart, you’re probably going to discover that you don’t have much of the information that’s required. Most advisers don’t. But once you gather the background on your clients — which may take more than a week — and incorporate that information into a communications plan, you’ll find that your relationships with them blossom. If clients question why you are asking so many questions, tell them, “We are updating our records to better serve you and these are a few areas where we like to have information that’s as complete as possible.” Completing a Top Client Background Chart is the foundation for your internal and external communications — and it makes developing the communications plan easy. Coming up: Week 2: Selecting the components of your communications plan. Maureen Wilke has helped thousands of advisers increase the value of their businesses. The founder of Wilke Associates Inc. (connectedadvisor.com) in Glen Ellyn, Ill., Maureen has spent nearly two decades in executive positions in wealth management, sales and training. She has been associated with several highly regarded firms, including Nuveen Investments, and currently advises many product and advisory firms on issues of practice management and adviser productivity.