A Recipe for Failure

Much has been written in this space about how to attract, service and retain affluent clients, but there has been precious little about what actions to avoid. Drawing from my firm's research, here are 10 transgressions virtually guaranteed to repel affluent prospects and clients. The bulk of these are simple common sense. But before you reject them on that basis, consider that the affluent clients

Much has been written in this space about how to attract, service and retain affluent clients, but there has been precious little about what actions to avoid.

Drawing from my firm's research, here are 10 transgressions virtually guaranteed to repel affluent prospects and clients. The bulk of these are simple common sense. But before you reject them on that basis, consider that the affluent clients we surveyed identified each of the following as a significant area of dissatisfaction. Somewhere, somehow, some high-net-worth advisors are making serious, but easily remedied, missteps. Are you one of them?

Neglect:

You might not think that you are neglecting your affluent clients, and they might not come right out and call you on it, but our research says that wealthy clients frequently feel neglected by the “salesperson” who was so attentive while romancing in the prospecting stage. Have you scheduled quarterly, yearly and milestone review meetings with each affluent client? Do you have a strategy in place that assures proactive contact with the right clients at the right time?

Poor service quality:

Across the board, the affluent are annoyed with the service they're receiving, and there are strong indications that they aren't going to take it anymore. This has serious implications. Provide excellent personal service, and you will have loyal clients who will provide introductions and referrals to you. Poor service will shut that pipeline down.

Complacency and inefficiency:

Top-flight practice management is a must. The affluent won't tolerate things falling through the cracks. Many attained their status by being competent and committed professionals, and they expect no less from you. Do you and your team members personally “manage” each prospect and client contact, or do you try to “pass it off” to someone else? Do you follow up on everything? Do you always keep your promises?

Inconveniences:

The affluent are seriously time-crunched — many work over 60 hours per week — and have little tolerance for being inconvenienced. They don't like the never-ending stream of paperwork from financial institutions, which is why helping organize and coordinate your affluent clients' financial documents is so important. Indeed, convenience is one of the most significant criteria the rich use in choosing a primary financial advisor. Is everything in your practice geared towards client convenience? Are you constantly looking for ways to simplify and streamline procedures?

Technical deficiencies:

It is easy to fall in love with the newest technology, but it's the “falling in love with it” that becomes a trap. Few, if any, of your affluent clients are doing business with you because of your technology. At the same time, you can lose clients if your technology is not up to par. The important thing is striking a balance. Do you have the most efficient technology for meeting the needs of your clients? Are you and your team members up to speed with that technology?

Manipulation:

What a surprise: The affluent don't like being manipulated. Our research tells us they especially feel manipulated during the sales process. Are you totally upfront about fees and reasons for making portfolio changes? Do you make certain you always have your client's best interest in mind when presenting a new product or service? And once again, do you deliver on all promises?

Deceit:

This is a worse offense than manipulation, but a close cousin. The recent spate of corporate malfeasance, whether within the financial world or business in general, has caused the affluent to go beyond skepticism and cynicism. They are now looking for deceptive business practices. Is honesty truly your best policy? Do you have a reputation for impeccable integrity, and if so, is it deserved?

Telling, not listening:

This is the bane of many financial advisors, a collective blind spot, if you will. To the affluent, telling is selling. Their finances are complex, and they want to be convinced you fully understand their personal, business and family situations before recommending solutions. They want you to listen, and many will flatly leave you if they sense you are not paying attention. Do you apply the 80/20 rule to all communication with affluent prospects and clients — 80 percent listening/20 percent talking?

Technical jargon:

The affluent quickly become frustrated with industry lingo. They actually come to the table with greater knowledge than the average client, so they immediately know when you are using technical jargon — and they know you are doing so in an effort to impress them. The more you can communicate in lay terms, the better. Translate statements, provide simple net-worth summary statements and make your communication as palatable as possible. Have you sat down and identified specific ways to communicate the language of financial services in common, everyday terms? Have you translated working documents into lay language?

Impersonal relationship:

Personalized service is the only way to keep affluent clients — form letters are out! Have you evaluated your personal face-time with each affluent client and then assessed the strength of your personal relationship? If it's not strong, you are vulnerable. If it is strong, each of your affluent clients should lead you to at least six new affluent clients.

Addressing the above does not require a McKinsey consultant on the payroll. Yet, as basic as these 10 faux pas appear, fully expunging them from your business can be a huge task. Here is a simple method I've used that seems to work quite well:

  • Have every member of your practice read the above.

  • Meet as a group and discuss your thoughts. Encourage everyone to identify three areas that need work.

  • Discuss each area identified, determine what you will do to correct each area, then prioritize those actions.

Remember, its baby steps, eliminating one affluent faux pas at a time.

Writer's BIO: Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com

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