As the financial advising industry continues to experience great change, from new regulation like the Department of Labor fiduciary rule to the development of new turnkey technologies, it’s not uncommon for advisors to worry about sustaining their businesses and retaining their clients.
While the challenges advisors face are real, it’s important for them to remember the value of the relationships they’ve built with their clients and continue to nurture those connections. At the end of the day, advisors who sustain strong client relationships built upon trust, collaboration and a mutual understanding of the investor’s financial goals will find success.
Start From the Right Foundation
The first step in building or strengthening a client relationship is to ensure that you fully understand the investor’s long-term goals and purpose for investing. This type of understanding doesn’t come from simply having a client fill out a basic survey or asking superficial questions about what they hope to achieve. Rather, it requires engaging in thoughtful conversations that seek to uncover how an investor’s goals fit within their larger life plan. Ask the deeper questions: What are their greatest concerns about retirement? Do they have certain anxieties about money? While these questions are not necessarily essential for creating a financial portfolio, they will put you more in tune with your clients’ needs and enable you to better provide holistic financial counsel.
Advisors can leverage many resources to guide these conversations and help investors feel more comfortable opening up. For example, AssetMark offers questionnaires and open-ended documents designed to uncover more thoughtful answers about a client’s deeper financial goals.
Understand All Aspects of Their Financial Life
Maintaining strong relationships with clients requires understanding and advising on all aspects of their financial lives, as opposed to just focusing on portfolio management alone. This means having a conversation about which financial plans a client already has in place, be it with an estate planning attorney, an insurance agent or a bank. Understanding these relationships will enable advisors to better serve their clients and create a strategy that is in concert with existing plans.
Although this type of relationship may sound overwhelming to some advisors, there are a number of technological tools that they can leverage to make sure they are getting the full picture of a client’s financial life. For example, online account aggregators and client portals are great ways to keep track of various financial plans at once.
Collaborate for Success
The key to any successful client relationship is establishing a level of collaboration, and not simply directing clients without taking their input into account. It’s important to explain the “why” behind decisions when advising clients so that they feel they are an essential part of the process. One effective tool is to outline hypothetical situations that might arise and then mutually discuss the best course of action with the client. This type of “teamwork” will further strengthen relationships while demonstrating your true value.
Despite the challenges facing the industry, advisors should recognize the value of the relationships they’ve built with clients. By strengthening these connections, and working to create financial plans that fit within investors’ overall life goals, advisors can make themselves indispensable.
Matt Matrisian is Senior Vice President, Strategic Initiatives at AssetMark, Inc. @AssetMark.