2012: The Year of Relevance

2012: The Year of Relevance

Staying relevant involves a special combination of the professional and the personal.

It seems as though everywhere I've traveled lately, financial advisors have been releasing a sigh of relief as 2011 wound down. You could almost hear the collective “Whew! Made it through the year.”

Welcome to what is now being referred to as the “new normal.” As we embark into 2012, financial advisors need to mentally prepare themselves to embrace this. Why? Because their professional world has changed forever. It's truly a global economy; politicians around the world are in gridlock (at best), uncertainty reigns, and today's affluent investor recognizes the importance of being on the receiving end of sound advice.

Which is why, from the financial advisor's perspective, we are referring to 2012 as “The Year of Relevance.” This phrase emerged from one of our elite advisor focus groups and was used in the context of managing affluent client relationships. From the vantage point of these elite advisors, it was this “relevance” that enabled them to strengthen relationships to the extent they were able to successfully penetrate their affluent clients' centers of influence. In other words, this relevance was a marketing strategy as these advisors averaged $42 million of new client assets in the calendar year. Which is what our research has been telling us — relationship marketing is codependent on sound relationship management.

So, how does an advisor make certain that he or she is relevant in the lives of affluent clients? I wish there was a simple answer, but there's not. It involves a special combination of the professional and personal all woven into the fabric of relationship management. This means providing comprehensive wealth management solutions in a professional manner while paying close attention to some of the softer, more personal areas — a terrain many advisors are unfamiliar and/or uncomfortable with.

This personal arena can be quite broad and all-inclusive. So to put it in context, think in terms of having intimate knowledge regarding family issues, helping to prevent family problems, and knowing what is important to each family that isn't related to their portfolio. As the trusted professional overseeing the family's financial affairs, a lot is expected.

Warning to Advisors — Make no mistake about this; your attention to these personal areas will define the strength of your affluent client relationships. And the strength of your affluent client relationships will determine your level of success in acquiring new affluent clients. When affluent investors changed advisors, the most common reason cited is a lack of communication and poor service. It's the number-one complaint affluent clients have about their financial advisor. Now don't misinterpret this. Providing comprehensive wealth management solutions is just as important, but it has evolved; clients expect it from their financial advisor.

No advisors will differentiate themselves through, say, financial planning. If you're not providing financial planning for your affluent clients, you're vulnerable to an advisor who offers this service. The softer, more personal areas are where you set yourself apart.

An exercise that can help you make 2012 “The Year of Relevance” involves categorizing all you deliver to your affluent clients in two buckets: Wealth Management and Personal Service. Wealth Management contains such items as creating and executing an up-to-date financial plan; meeting investment performance expectations; organizing and updating all important financial papers; and using outside experts to help with other financial areas. Personal Service contains such items as communicating in a timely, clear, and personal manner; getting personally involved with a client's family beyond their investments; fully understanding each client and his family's goals and needs; and solving problems quickly.

I'm sure you get the rationale. Size up your performance and grade yourself. Whatever wealth management services you haven't been providing, or haven't been providing at an “A” grade level, should be tagged as areas for improvement. You'll want to pay attention to both buckets since you need “A” grades across the board to be positioned as relevant today.

I recognize that change isn't easy, nor is replicating the profile of today's elite advisor. But take one step and one area of improvement at a time, and it's doable. Commit to making 2012 your year of relevance and you'll find yourself excelling in this new normal and mirroring today's elite advisor.


Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients.

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