Clients who are engaged are more likely to see the advisory services you provide as valuable, says Julie Littlechild, CEO of Advisor Impact Inc. in Toronto. And that value extends well beyond simple market performance.
“We see a connection between value and engagement around the importance of advice,” Littlechild says. “You can see a marked difference between the way the ‘average’ investor vs an ‘engaged’ investor perceives the value of advice relative to market performance.”
How do you go about defining what is “valuable” to your clients? And how can you transform clients from “average” to “engaged”?
Littlechild offers the following tips on how you can use the “value of advice” narrative to build an engaged base of clients:
> Dig for goals
When you first meet clients, you must listen for their big-picture goals.
“In many respects,” Littlechild says, “the value of advice speaks to the role that the advisor plays in that client’s life.”
Look beyond the surface and dig deep with probing questions to help you understand your client’s financial goals and why he or she wants to achieve them.
As with a marriage, you should not settle for the “everything is fine” answer. Often, everything is not fine. Keep questioning.
> Categorize your services
In order to enhance client engagement, Littlechild suggests, divide the things you do for your clients into three categories.
At the lowest level, you would have “basic” service, which might include returning client calls. The next step up focuses on the range of services you provide — for example, the variety of planning options you offer your clients.
At the top of the hierarchy is the idea of “advice,” which would identify how you create financial plans to help your clients reach their goals.
In order to build engagement with your clients, it is important that you work at this top tier as much as possible, Littlechild says. “Good” service alone, while important, won’t lead clients to believe they are getting incredibly valuable advice.
“[This top level] focuses on everything above and beyond what a client would anticipate any advisor would provide.”
You might ask yourself: “How am I helping this family define what they want to achieve?” Or, more simply: “How do I actually draw out what the client’s goals are?”
> Speak the same language
If you are speaking Mandarin but your client is speaks only Swahili, it’s unlikely that you will relate to each other. Even if you both speak English, you could still be creating a language barrier as you communicate with your clients every day.
“We often see advisors thinking in overly technical terms,” Littlechild says. “If you were to ask an advisor to define the value of advice, they would likely discuss the sophistication of their investment strategies and returns. But that’s not how a client would define it.”
In all likelihood, clients will offer a much different definition, says Littlechild: “Clients would talk about what they are trying to accomplish in their lives as they pursue their dreams.”
Ultimately, building engagement and providing value to your clients is a matter of the way you will help our clients achieve those life goals.
Next: Client engagement and financial planning.