Reviewing your client reviews

Advisor: I know you are always encouraging advisors to take time to work on their businesses as well as in their businesses. So, I set aside a full day this past summer to really think about what is working well in my practice and what is not. What I discovered in the process is that there are quite a few things we do in our business “just because” – as in “just because we have always done it that way” or “just because we have never really asked ourselves if there is a better way.”

While I identified quite a few activities and processes I want to evaluate further and probably change, one of the most startling revelations centred on our review meetings with clients. When I was brutally honest with myself, I realized that they aren’t much fun anymore – for me or our clients. They have become mechanical and repetitive, to the point that some clients are telling us they don’t need to see us as often or that they would be just as happy to receive an emailed copy of the information we normally would discuss.

I still feel it is important to keep clients informed and to make sure the information I have about them is up to date. I also believe that face-to-face contact makes everything more personal and keeps the relationship strong. Am I wrong in thinking these client review meetings are important? And should I be doing something different?

Coach says: I am with you on this one. Although technology has made it easier to stay in touch with clients, it shouldn’t replace what I believe is one of the most powerful communication and relationship-building tools available to you: a face-to-face meeting with your top clients. Note that I specifically said, “Top clients.” I have written extensively in this column about the need to segment your clients, then tier your service accordingly. There is no doubt in my mind, however, that your top clients need and deserve to see you in person on a regular basis.

When review meetings lose their lustre, it often is because they have deteriorated to become just a time to go over the client’s financial plan and investment performance. But review meetings should be far more valuable. These meetings provide an opportunity to reconnect with clients and have them share the most important details of their lives. Many top advisors use the information they glean from review meetings to guide an entire year’s worth of discussions about clients’ personal and financial goals and the paths to reaching them.

To take full advantage of client review meetings, you must be thoroughly prepared. A clear agenda to guide your conversation ensures you create opportunities to hear clients’ concerns, share your expertise and reach consensus on direction and action items. Your goal is to get the information you need to deliver outstanding service while making your clients even more confident in you and your work together.

Although you might think you know everything about a client, take the time to refamiliarize yourself with his or her financial plan, investment portfolio and any communications or activities that occurred since you last met. Study this information so the details are fresh in your mind. You don’t want to fumble through a folder looking for information when a client mentions his youngest daughter’s RESP or his own long-term care program.

You want your client to depart your meeting feeling that you really know and understand him or her and are focused on his or her needs.

Don’t be afraid to give your clients homework. Before your meeting, prompt them to think carefully about their lifestyle, financial goals and any issues they wish to discuss when you get together. This not only makes the meeting more efficient but also gives clients partial ownership of the agenda, so they become partners in the process. We encourage advisors to send a copy of the agenda to clients in advance of the meeting, followed up by a phone call to review the proposed topics for discussion and invite the client to add any of his or her own.

Here are the four main components of a good review meeting:

1. RECONNECT AND UPDATE

Start by asking about something positive or empowering in your client’s personal lives, such as his or her children, career, recent travel or hobbies. This sets a positive tone for the discussion, reduces the client’s anxiety and encourages bonding.

When the timing is right, ask about recent changes and updates on situations discussed at previous meetings. For example: “The last time we met, you mentioned that your father was having a hip replacement. How is he doing?”

Demonstrate that you care and that your relationship is with the person, not with his or her portfolio. As your client shares his or her stories, listen for issues and opportunities such as changes in attitude toward risk, retirement goals and health concerns.

2. FINANCIAL REVIEW

Once you’ve gotten an update from your client, discuss how these recent developments might affect his or her financial goals and strategies. Forget generic reviews of market conditions or investment strategy. Clients already have most of that information from the news; if they don’t, a brief recap is likely to satisfy the purposes of your meeting.

Instead, review your client’s progress toward established goals. Use a visual aid, such as a balance sheet listing changes in the client’s assets and liabilities, or colour-coded graphics indicating whether each aspect of the client’s plan is on track (green), needs attention (yellow) or is in trouble (red).

Focus on positive achievements first, to show what has been accomplished – since you last met, over the past year and since you began working together. For example, you might recall how you made tactical investing decisions in response to market conditions or handled a tax situation. Remind your client of these achievements so he or she appreciate that you do more than just invest their money.

Then, review your client’s investment performance. Always discuss returns in the context of your client’s overall goals and risk tolerance. For example, if the portfolio generated a 5% return in a year in which the stock market was up by 10%, explain that the client’s portfolio return is appropriate for a balanced investment approach, which you previously agreed was appropriate for the client’s risk tolerance and goals. Discuss returns of individual holdings and explain why those securities are in the portfolio.

Pause in your presentation periodically to ask your client if he or she has any questions or concerns. Pay close attention to silence: a client may be reluctant to admit he or she doesn’t understand something, so be encouraging by saying something like: “Does this make sense?” or “Did I explain that well enough?”

If your review reveals that adjustments are required, don’t simply tell your client what you intend to do. Instead, offer a few options and present the pros and cons of each, thereby empowering your client to make the decision based on your advice.

3. REVIEW AND WRAP-UP

Leave your client feeling confident about his or her financial plan and the relationship with you as a trusted advisor by recapping both the decisions you have reached together that day and the next steps.

Schedule your next communication with the client, whether that is by an email, a followup phone call or another meeting. Assigning dates to these activities reinforces your client’s sense that the relationship is strong and ongoing.

4. AFTER THE MEETING

To ensure continuity and effectiveness:

– Review your meeting notes, paying particular attention to anything that requires immediate action.

– Schedule time to complete (or delegate) the next steps you have agreed to initiate.

– Highlight issues to discuss at the next review meeting to help to prepare that agenda when it comes up.

– Send a thank-you letter or email that recaps the major discussion points and decisions and reminds the client of the next steps.

To put the fun back into your review meetings, demonstrate to your clients (and to yourself) that these meetings present powerful opportunities for the kind of in-depth, personal discussions that will help both of you feel good about your role as the trusted steward of your client’s wealth.

Good luck!

George Hartman is co-founder and managing partner of Accretive Advisor Inc. in Toronto. Send questions, comments and opinions on any aspect of practice management to ghartman@accretiveadvisor.com.

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