Special Feature

Client advisory boards

A client advisory board (CAB) is one of the most effective ways to learn about what your clients value and how you can improve your practice. This three-part series outlines questions to ask before setting up your CAB, who should be on your board, and what your board members can expect.

Practice Management

You must be willing to listen and follow through on recommendations

By Tessie Sanci |

A client advisory board (CAB) is one of the most effective ways to learn about what your clients value and how you can improve your practice, says Stephen Wershing, president of the Client Driven Practice in Rochester, N.Y.

By gathering a select group of your clients and asking them key questions about the service they receive from you, you will find out what works, what doesn't, and what areas of your practice should be improved upon.

In order to benefit from a CAB, you must be open to feedback and commit to following through on recommendations — whether you choose to implement them or not.

Here are four questions to ask yourself before starting a CAB:

1. Am I willing to make changes to improve my practice?
A CAB is a platform that allows a group of your clients to express what they feel is missing from your practice.

If you are not ready to seriously consider implementing suggestions, you should not be asking for that feedback.

"[Some advisors] are happy to gather their clients and let them talk," Wershing says. "But they're probably not going to take action on it — and that's worse than not having asked in the first place."

While you do not have to use all recommendations, the board's success relies on your willingness to consider them and explain your ultimate decisions.

2. Do I know why my clients chose me?
An advisory board is also an opportunity for clients to let you know what they appreciate in your practice and how you are different from other advisors.

One of the most difficult challenges for advisors, Wershing says, is to explain exactly why a prospect should choose him or her over other advisors.

Says Wershing: "If you ask 100 investment advisors, ‘Why should I choose you over all the other advisors I have access to,' I would bet 80 of them would give the same answer. And if that's the case, it's not the right answer."

Your clients, through A CAB, could give you a more complete answer to that question.

3. Can I let others lead?
During a CAB meeting, the dynamic between the advisor and the clients changes. Unlike your role in a client meeting, you are not the one guiding the conversation or giving instructions in a CAB meeting.

Your clients will be more comfortable providing candid feedback to a neutral third party. Wershing recommends using a professional facilitator or another person, such as a client who is experienced at making presentations and gathering feedback.

Your role is to be present and participate, says Julie Littlechild, CEO of Advisor Impact Inc. in Toronto. For example, you can ask follow-up questions.

4. Am I willing to follow through?
"[A CAB] takes work," Littlechild says. "It takes a commitment. You don't ‘dabble' in an advisory board."

Before organizing any CAB meetings, define your objectives and decide on how your CAB will work. Consider the kind of information you want to gather and how you will structure meetings, so they are not just conversations among peers. Otherwise, you could be wasting your time and your clients' time.

This is the first instalment in a three-part series on client advisory boards.

Next: Who should be on your board?