A new joint survey by Univeris Corp. and Advisor Impact Inc. shows just how quickly strong client service goals can pay off when advisors set, implement and meet them.

“We call them ‘high-contact advisors’,” Julie Littlechild, president of Toronto-based Advisor Impact, said in an interview with Stephen Smith, senior marketing director with Toronto-based Univeris, sponsor of the study, for IE:TV.

“These were the advisors who were really and truly meeting service goals,” Littlechild adds. “They had very high standards of services — and they were delivering on those standards.”

High-contact advi-sors’ books of business, on average, have $20 million more in assets under administration than those of their average peers. They also run more efficient operations with more profitable clients, says Littlechild.

The results of the Advisor Impact survey were released at the beginning of October at Univeris’s annual conference in Toronto. At the conference, Littlechild presented details of the survey, along with a five-point “road map” for advisors interested in implementing some of the tactics and strategies that the most successful advisors put to work in their practices, with the goal of generating strong referrals and growing their businesses.

In the survey, high-contact advisors were identified by their responses to a question about how consistently they believed they were meeting their service standards.

High-contact advisors represent the top 20% of advisors surveyed. The remaining advisors fall into either the medium-contact or low-contact clusters — 60% and 20%, respectively — of the respondents.

The advisors who are delivering on their service standards have faster-growing businesses. The average book for high-contact advisors has grown to $52.5 million, slightly less than $20 million more than low-contact advisors have amassed at $32.6 million, and $3 million more than medium-contact advisors, whose average book has reached $48.9 million.

“High-contact advisors say they are meeting their own service goals for 90% of their clients,” says Littlechild. “The low-contact group met their service standards only 23% of the time. Only a few years ago, your average advisor was speaking with only 65% of his or her clients [each year].”

The online survey of 1,088 Canadian financial advisors, with an equal representation from the mutual fund dealer and investment dealer channels, was conducted in June; the margin of error is +/-3%.

Littlechild says the survey aimed to identify some of the strategies and tactics that good advisors use in their businesses so that all advi-sors could learn from the data. “We developed a five-point plan aimed at allowing advisors to get closer to their peers in the high-contact group,” says Littlechild. “We didn’t want the data just for data’s sake.”

Here’s what the plan looks like, and the rationale for implementing the steps.

> Know Your Ideal Client — what they need, want and expect. High-contact advisors say 90% of their clients are “ideal,” compared with 71% for low-contact advisors and 77% for medium-contact advisors.

“It’s maybe not surprising,” says Littlechild. “But high-contact advisors are delivering to a smaller number of high net-worth clients, and that’s obviously having an impact on their ability to deliver [high service standards].”

> Define Your Service Experience. As an advisor, what is your service offering? What sort of reporting, and indirect and direct contact, will you maintain? And how frequently?

For Littlechild, defining your service experience includes not only the services you offer, be it wealth management or transactional, but also how you deliver it, including annual or quarterly client meetings, regular phone calls, e-mail blasts and other communications. “Reporting is important,” she says, “and you have to get that right.”

> Execute Effectively. High-contact advisors have often developed automated and standardized service processes.

“We asked advisors a whole series of questions concerning what processes they had in place,” Littlechild says, “and the high-contact group, which the average advisor might want to emulate, had a different approach to processes in four areas: creating, and updating, financial plans, formal portfolio reviews and reporting.”

For example, 70% of high-contact advisors standardize the creation of financial plans, vs 56% of all other advi-sors; 68% automate the welcoming of new clients, while about 57% of other advisors do so; 70% of high-contact advisors set formal portfolio analysis and review meeting with clients, compared with just 56% of average advisors.

The upshot is business efficiency and client profitability for high-contact advisors. The survey showed that the average high-contact advisor serves 189 clients who each have $278,000 in investible assets. That compares to the average low-contact advisor who has 398 clients, who, in turn, have about $82,000 in assets each. And the average high-contact advisor spends six hours a week serving the top 20% of his or her client base; the average low-contact peers, on the other hand, spends 13 hours a week serving the top 20%.

@page_break@A high-contact advisor will have an automated process for meeting with clients, for example, which, in turn, is tied into the client relationship management software used.

“For a lot of advisors,” says Littlechild, “they might have a plan, but it’s not linked to their technology, whereas high-contact advisors are getting it right on that front.”

For most high-contact advisors, automated processes permeate their entire businesses, adds Littlechild. It takes time and capital to invest, but it can pay off.

> Communicate Your Plan Effectively To Clients. Research shows that simply communicating a service level to clients keeps them engaged. And 73% of high-contact advisors do just that, compared with 57% of the rest of advisors.

What came through loud and clear with high-contact advisors was the extent to which those advisors help their clients understand what they can expect. Says Littlechild: “So, it was about communicating your value effectively.”

Clients whose advisors have set and met or exceeded standards by which they can be judged are the clients that tend to be the most satisfied, and the most likely to give referrals.

“They’re more satisfied and they’re more loyal,” says Littlechild. “Engaged clients are the ones providing all the referrals in a practice.”

> Measure Performance. Generally, high-contact advisors have a process in place to measure whether they are meeting their service standards — whether it be with client surveys or internal processes.

According to Littlechild, most advisors understand this point. When the survey asked advisors what they wished they could do differently, 60% of respondents wanted to know and understand more about what’s important to their clients.

Advisors interested in the five-point plan will find it heavily weighted on the third point — execution. In turn, that point is contingent on the development of a series of automated, standardized processes.

“When we looked at high-contact advisors’ list of tactics, they are standardizing risk profiling, they have methods in place to gather information on their clients, they have an operations manual,” says Littlechild. “Across all of our tactical survey, they were likely to do these things 10% to 20% more often [than other advisors].”

When it comes to the five-point plan, Littlechild adds: “Some advisors may only have to tweak; other advisors may jump in halfway through. But if you look at it all, it will help advisors meet their goals.” IE