Will technology make the principles that historically guided communication with clients and prospective clients obsolete?

That’s a question that was raised in a conversation I had with a financial advisor in his mid-30s who, a year ago, began using Twitter to communicate with clients and members of his network. He has received a good response, expanded his number of followers and suggested that social media will fundamentally change the rules regarding the way clients want to interact with their advisors. That means holiday cards and face-to-face meetings may go the way of Blockbuster Video and HMV stores.

This is the communications equivalent of the investment argument, “It’s different this time,” the four words that some investment veterans argue are the most dangerous for investors. That phrase was cause for debate during the technology boom of 1998 to 2000, as boosters of tech stocks maintained that traditional thinking on valuations didn’t apply to technology startups. And it came up again after the global financial crisis of 2008-09.

There is no question that technology has changed the context for the way advisors communicate with every client, from younger clients in their 30s to older clients in their 80s. At the same time, three things are unlikely to change, even as technology plays an increasing role in our lives.


Today, clients have an explosion of choices for advice, from bank branches to online automated advice through to traditional financial advisors. This proliferation of choice can sometimes lead to what psychologists call “decision fatigue” and, ultimately, paralysis, as too many choices can result in inertia prevailing.

To make it easy for prospective clients to choose you, you will have to stand out and answer the key question posed by clients: “How will I be better off working with you?”

Although that question is not new, the answer today must look very different from the way it did 20 years ago. In the 1990s, winning clients over was all about performance. Recently, an advisor told me about signing up for a service in the early 1990s that once every quarter mailed him a computer disc with updated performance of mutual funds. Using that disc, when meeting with prospective clients, he would first show them the performance of the funds that they held, and then contrast that with the performance of the funds that he recommended. Once he got prospective clients into his office, he told me, his conversion rate was over 90%, often at the first meeting.

Demonstrating clear value today is more challenging. Some advisors use case studies of clients whose circumstances are similar to those of the prospects. These case studies show where the clients were before working with the advisor (“the problem”); the steps that were implemented (“the solution”); and where those clients are today (“the outcome”).

Other advisors show prospects samples of financial plans, emphasizing the outcomes that have resulted from those plans. And one advisor I know who has a hardcore contrarian value approach, shows prospects hardcopies of letters he has sent to clients going back 20 years, including letters warning of market overvaluation in the periods prior to the tech correction and to the global financial crisis.


One of the big changes in the past 20 years has been the movement of financial planning into the mainstream.

Twenty years ago, many advisors who worked at bank-owned brokerage firms scoffed at financial planning as something that appealed only to clients with smaller portfolios. Today, every firm has financial planning tools on their platform and more and more advisors are integrating financial planning into their approach.

In the post-global financial-crisis world, we have seen heightened concern on the part of clients of all ages about their financial futures. That has led to a growing appetite for a financial road map that will lay out a clear path toward getting to their goals and identify risks and trade-offs along the way. Any financial advisor who doesn’t offer financial planning to clients will be at risk of losing those clients to another advisor who does.

New financial planning tools offer much more flexibility to show what-if scenarios, allowing advisors to show clients the impact, on the fly, of changes in decisions such as savings level, retirement age and spending in retirement. These new tools not only provide more sophisticated modelling, but allow a level of participation and engagement by clients that would have been impossible even five years ago.

One advisor I talked to recently told me that whenever prospects agree to sit down in his boardroom and allow him to model what their retirement might look like in response to a series of questions, two things happen. First, the conversation goes on much longer than a typical meeting with prospects would last. And second, especially if the prospects are a couple, there is a much greater dialogue and depth of discussion, almost always leading to a follow-up meeting.


Although frequent communication and staying top-of-mind is valuable, when it comes to the glue that holds relationships together, nothing replaces in-depth one-on-one portfolio reviews and updates on financial plans. That’s why successful advisors have historically ensured that they meet with their top clients at least once a year. And that’s why in-person meetings will continue to be at the core of client relationships.

When dealing with millennials, research from U.S. back-office firm Pershing Ltd. suggests that some younger clients prefer virtual meetings and screen sharing to meeting at an advisor’s office. But, whether the meeting takes place in your office or happens online, the face-to-face element will still be paramount.

Supplementing those face-to-face meetings will be personal touches that stand out, something that has always been important, but never more than today, when almost everyone under the age of 60 reports that they are drowning in online communication.

One advisor hired his teenaged son last summer to work in his office. As a result, he told any clients who were interested that his son would go to their homes to set up Skype for them. They could use Skype in his quarterly calls with them – and also with their family members. The response to this personal touch got an unprecedented response, especially from older clients who could now communicate with their children and grandchildren.

I saw another example of the power of personal contact first-hand, when an advisor invited me to attend his annual holiday brunch for clients on a Sunday last November. As 150 clients arrived, he had a children’s choir singing, and each table was decorated in the holiday spirit. In his short remarks, he thanked his clients for their confidence and told them how delighted he was to be able use this brunch to show his appreciation in a concrete fashion.

The clients at my table all talked about how much they looked forward to this holiday brunch each year, in some cases bringing their adult children along.

A final example of a personal touch relates to Thanksgiving cards that some advisors mailed to clients last fall, saying that as a thank you for the opportunity to work together, they had made a contribution to a children’s home in Africa on behalf of all of their clients.

Every advisor who did this reported outstanding feedback from clients – with just one exception. That exception was an advisor whose marketing department did not approve him mailing cards in light of the firm’s policy on eliminating the paper that went to clients. But it did authorize him to send the card via email. The message was the same, but sending it via email virtually eliminated the impact.

Dan Richards is CEO of Clientinsights (www.clientinsights.ca) in Toronto. For more of Dan’s columns and informative videos, visit www.investmentexecutive.com.

© 2017 Investment Executive. All rights reserved.