Many financial professionals see client reviews solely as a time to discuss portfolio performance. And performance is certainly important to any client review. But financial advisers have an opportunity to push service from typical to exceptional by bringing to the table other topics that are essential to clients' financial and general well-being.
The perfect opportunity to do this is during regular client reviews. Differentiating yourself and your practice during such reviews can go a long way toward delivering consistent client experiences that enhance relationships, show your value and build loyalty.
A time-intensive aspect of client service, the periodic review rarely receives the respect it deserves. Yet as one of the few times that advisers and clients sit down face to face, reviews can be valuable drivers of client retention, growth of wallet share and even client acquisition via referrals.
During these meetings, advisers can set themselves apart by going beyond the basics of reviewing the markets, client assets and recent life events. A great way to expand the “typical” conversation is to explore key wealth management issues and tactical business ideas, as well as the client's expectations for your service.
Begin with the basics — life events that have happened since the last meeting that might warrant a repositioning of the portfolio. Next is a portfolio review, focusing on asset allocation, equity sector analysis, a fixed-income analysis and a look at specific gains and losses.
An overview of the market and key trends will bring informative color to this discussion.
But what truly will differentiate you is a wealth management conversation that goes beyond the expected. Some areas worth examining are:
• Investment philosophy, which entails providing insight into how managers achieve their performance.
• Estate planning, including strategies for trusts, provisions for incapacity and types of power of attorney.
• Retirement accounts, including strategies for rollovers and Roth individual retirement account conversions.
• Philanthropic and gifting strategies, including charitable-remainder trusts, charitable-lead trusts and family foundations.
• Asset titling, including the use of custodial accounts related to the Uniform Transfer to Minors Act and the updating of beneficiary forms.
• Overall insurance strategies, including specialized property protection for fine art, antiques, etc.
• Tax planning, including tax-efficient income withdrawal methods and loss harvesting.
Providing clients a targeted investment recommendation during the review also demonstrates your commitment to helping them meet their unique financial objectives. Discussing the investment outlook, asset allocation views and tactical-investment ideas can help in drafting or validating a course of action.
Don't fail to use the review as a forum to explain all the services that you offer, as well as to reiterate the value of professional advice and guidance. As every adviser knows, it is easy to lose a client who simply didn't know that you offer a service that others are advertising.
Finally, ask for a grade at the end of a review. Ideally, it should be based on previously determined criteria.
In doing so, you will help ensure that you and your client are on the same page, emphasize your focus on quality of service and signal how important it is for you to meet expectations — all factors that can increase the likelihood of long-term client retention.
Above all, assess your approach to the client review according to the same criteria that you should apply to every facet of your client service. The key question to ask in every client review is whether you are consistently and effectively distinguishing your service and demonstrating value apart from market performance.
Also, are you delivering an experience that bolsters the relationship and builds loyalty to you, and are you shaping every client into an “advocate” who will want to refer you to others?
Investors have rediscovered the value of a trusted adviser. Of the 500 investors polled recently by my firm, 82% reported increased contact with their advisers after the financial crisis, and 79% said that they were more likely to act on an adviser's guidance.
But more than ever, communication is critical to maintaining successful adviser-client relationships. Although they have no control over markets, advisers have a meaningful opportunity now to influence the quality and quantity of their client interactions, and strengthen those relationships for years to come.
Michael Bitterly is managing director and head of affiliate business at BlackRock Inc.
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