Have you written out a financial plan for your clients? If you have, you are already on the path toward engaging your clients, says Julie Littlechild, CEO of Advisor Impact Inc. in Toronto.
Engaged clients are more profitable, more loyal and more likely to provide referrals than clients who are merely satisfied. And Littlechild’s research shows a direct link between financial planning and client engagement.
“Financial planning data is a driver of client engagement,” Littlechild says. “It also sends a powerful message to prospective and existing clients about the importance of financial planning.”
Littlechild offers the following tips on how to use a financial plan to boost client engagement:
> Formalize the plan
According to the Economics of Loyalty, the report from a recent study by Advisor Impact and the Investment Industry Association of Canada, 62% of engaged clients have a written financial plan, vs 44% for all clients.
Moreover, 45% of engaged clients consider a financial plan to be valuable in helping them achieve their goals, vs 34% for all clients.
Too often, advisors rely on the belief that they “understand” their clients’ goals, but do not spell out those goals formally.
It might sound simplistic, but take the time to write out the plan with your clients. Adding that planning process to your practice will help encourage more discussion, and engagement, with your clients.
> Reach across generations
Include the topic of multi-generational planning in the financial planning discussions you have with your clients.
“The connection between engagement and multi-generational planning is simply two sides of the same coin,” Littlechild says. “We know that client engagement is highly personal and expands beyond investments.”
Littlechild’s research shows that engaged clients are more likely to work with advisors who take a broad-based and long-term approach to their finances. As well, the research shows that clients who have a financial plan are better prepared to cope with a significant market downturn.
By demonstrating that you are aware of a client’s concerns for his or her children and grandchildren, you will not only be engaging that client, but also putting yourself in a good position to manage his or her portfolio across those generations.
> Offer a “family approach” to finances
Following closely on the heels of multi-generational planning, Littlechild’s research shows, engaged clients are more likely to work with an advisor who provides a family-based approach to advice.
A good way to encourage a family-based approach is to have an annual or semi-annual meeting in which the family is brought in to your office to discuss the plan from a family perspective.
“Clients are blown away by that offering,” Littlechild says, “because they will see that they won’t get that kind of service anywhere else.”
An offer of a family meeting shows your clients that you have a plan in mind and will consult everyone involved to make sure they are on board. Also, it shows that you have put some added thought into defining your client experience.
For more on this topic, watch for our cover story in the Building Your Business section of the June 2013 issue of Investment Executive.