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Advisor-Client Communications Agreements

We’ve found that affluent clients leave advisors far more frequently for poor service than for poor financial advice. Don’t get us wrong – financial advice is the core of your business, but the affluent consider that a hygiene factor.

Greensboro: “What’s the biggest reason why the affluent look for another advisor?” asked Kim on a recent conference call. “It seems that if I’m meeting with potential clients, I should have a good understanding of why they’re considering a change.”

Kim’s question hits at the heart of our research on affluent loyalty. We’ve found that affluent clients leave advisors far more frequently for poor service than for poor financial advice. Don’t get us wrong – financial advice is the core of your business, but the affluent consider that a hygiene factor. They expect you to be able to manage money, much like they expect their dentist to be able to fill cavities.

We thought it might be helpful to cover Communications Agreements because we’ve found them to be very helpful in advisors showing prospects what they could expect if they were to become a client. This is a simple 2-3 page handout that showcases the services you provide, your process for review meetings, your expected response times, the way in which you leverage outside experts, and so on.

Communications Agreement – Usage:

The Communications Agreement is helpful for three main groups:

Prospects: Bring copies of your Communications Agreement to share with prospective clients. Explain to them how you give this to new clients and use it as a roadmap for the relationship going forward. Make certain to have both spouses present for this explanation – our research shows that communication is even more important to affluent women.

Clients: Share this document with clients. If you’re already doing what is promised in your Communications Agreement, let them know you wanted to put it on paper to make certain everyone is on the same page with regards to service. If there are some elements that are new to your service model, let them know that in light of our recent financial crisis, you’ve ratcheted up contact in some areas, just to make certain everyone is kept up to speed. Again, be certain to share this with both spouses.

Professional Alliances: Show your Communication Agreement with CPAs and attorneys. This is a great way to show them how you’d work with clients they’d refer into your practice.

Communications Agreement – Components:

Consider the following components for your Communications Agreement. This should be customized based on the type of services you provide.

Our mission is to serve your family. Our team will work closely with you as we provide solutions for the multi-dimensional aspects of your family’s financial affairs. Your family can expect open communication, ongoing due-diligence, and first-class service as we will be working to provide your family with the best financial advice and oversight possible. This is our promise to you and your family.

Client Reviews:
Although you will have total access to our team and we will be in constant contact with you, we still find it important to be able to meet with you on a quar­terly basis. We will review your portfolio, discuss any changes in your family’s situation, and keep you informed of anything that may affect your family’s financial goals. As a valued client, in addition to your quarterly face-to-face port­folio reviews, we will be reaching out to you periodically throughout the year. You’ll also have our cell phone numbers so that we can be avail­able to you on a 24/7 basis.

Financial Organization:
We recognize that the financial services industry creates an avalanche of documents, and we are committed to helping with this problem. To that end, your family will receive a Personal Financial Organizer and we will work constantly to help you keep it organized. During every client review, we will make certain every aspect of your financial affairs is current and remains organized.

Comprehensive Wealth Management:
Serving as your family’s CFO is in many ways like being your family’s financial physician. We will bring in outside experts, professionals who have been carefully selected, whenever a specific need arises. However, unlike your family physician, we not only organize and coordinate your meeting with one of our experts, we accompany you to every meeting possible.

Response Time:
If you are unable to connect with your desired party on your initial phone call, your call will be returned within __________. All calls made to our office before 5:00 p.m. will be returned the same day. Calls made after 5:00 p.m. will be returned the next business day.

Financial Awareness:
With all the confusion and misinformation within the world of financial services, we are committed to educating our clients. We recognize that it is our responsibility to look out for your best interests, but we believe that a fully informed client is a healthier client.

In an effort to generate consistent feedback from our clients, we have put two initiatives in place: we spend time with our clients, both professionally and socially, and we are constantly updating your family’s personal profile. We want to know what is important to you, where we need to improve, and what’s happening in your family.

For new advisors like Kim, this can be a great tool to illustrate one of your competitive advantages; being able to provide a high level of communication and service. We suggest taking some of our language, making the necessary modifications, and printing it on your letterhead. You can start immediately using this with clients, prospects and professional alliances, making certain you engage both spouses in the explanation.

A word of caution – don’t let your pen make promises your team can’t deliver. Be prepared to live up to this document both now and in the future. The advisor that schmoozes prospects and neglects clients is likely to lose as much as they gain.

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