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Advisors must redesign their entire approach, starting from the client's point of view.
To appreciate the importance of this paradigm, think back to this moment in the movie City Slickers: Mitch, the world-weary New York executive who, with his friends, signed on to a cattle drive at a remote dude ranch. He is talking to Curly, the seasoned, rugged ranch foreman. Curly looks at Mitch and holds up one finger.
Curly: "One thing. Just one thing. You stick to that, and everything else don't mean [expletive deleted]."
Mitch: "That's great, but – what's the one thing?"
Curly: "That's what you gotta figure out."
The crux of the story involves Mitch and his friends pursuing the "vision quest" prescribed by Curly. Over the course of the movie, they each, in different ways, figure out their "one thing."
For RIAs, the "one thing" is delivering excellent fiduciary service to as many clients as possible. But too often, as advisors launch their practices, the day-to-day management of the firm requires the advisor, so she can maintain both growth and client loyalty, to operate in a reactive mode most of the time as she tries to respond meaningfully to a growing range of client requests and needs. In these cases, what started as a firm with a core growth strategy becomes a place where each day sees frantic activity that still seems to leave advisors with the sense that, despite all their earnest efforts, important things were left undone.
One way that successful advisors avoid this scenario is by carefully cultivating their client base established on the commonalities shared by their niche. Segmentation, or separating clients into categories based on criteria selected by the advisor, is an important first step. Segmentation allows advisors to view their practice strategically and gives them the ability to allocate time and attention based on what they perceive as the main drivers of the practice. By spending more time with the clients who are key to the success of the business, they ensure that the "one thing" is taken care of.
But what about the clients?
On the other hand, is that really the "one thing" that RIAs are searching for? Delivering competent, timely, and worthwhile service to key clients is foundational, of course, but in many ways, it is a basic aim. Most advisors aspire to something greater, a goal that elevates their practice above a reputation for delivering the basics to one that is characterized by an extraordinary client experience: one that turns clients into "raving fans," as described by Ken Blanchard and Sheldon Bowles in their book of the same title. For RIAs who want to achieve this "Holy Grail," it's not enough to segment your book and arrange your client interaction deliverables accordingly. Taking your practice to the next level involves a deeper dive into aligning the hearts and minds of your clients with the resources, technology, and overall client experience.
A changing landscape
There are three trends I've noted that are rippling across various industries, including the financial advising profession. Accelerated by the COVID pandemic, these customer-engagement developments will continue to differentiate enterprises from those that are truly setting themselves apart by delivering outstanding customer experiences:
1. Defining a target market – Designing focused services based on a particular area of provider interest/expertise or a specific client type (i.e., segmentation).
2. Personalization – Providing services focused on individuals' unique needs (this is a big one I addressed in my article: How Financial Advisors Can Achieve Personalization at Scale).
3. Collaborative construction – Involving clients in the design of services, delivery methods, and key interactions (the "secret sauce").
This third step moves beyond segmentation toward making clients active partners in product or service delivery. This is where advisors can begin to build their practices into a locus for transforming clients into committed advocates – the kind who generate more referrals, bring more of their assets to the firm, and remain loyal and engaged throughout various market cycles because they are more interested in the value added by the advisor than temporary outcomes in their portfolios.
Based on these broad trends, there are four steps for RIAs to create exceptional client experiences.
1. Establish a niche
While it might be considered a noble goal to be "all things to all people," this simply lies beyond the resources and capability of most advisors. In my recent article, Less is More: The Power of the Niche; I talked about how advisors should ask themselves some key questions about their practices and the clients they are most interested in and capable of serving:
- What are the advisor's areas of strength, or what are they most passionate about? (i.e., estate planning matters; advising founders; financial coaching; family stewards, etc.)
- What qualities or characteristics define the advisor's ideal client? (i.e., small business owners; medical professionals; mid- to late-career professional women; entrepreneurs; etc.)
- What niches or segments are most compelling for the advisor? (A "niche" denotes an external definition, while an "ideal client" is a sub-group within that niche that comprises clients who are best suited to the firm by virtue of high net worth, connections with other key clients, etc.)
- How can these segments be defined in a way that resonates with both the advisor and the ideal client?
2. Get clients involved
RIAs and their staff often become distracted by matters of onboarding, file maintenance, compliance procedures, and performing client service functions. But these are all firm-centric rather than client-centric concerns. In other words, this is where the firm can differentiate itself. When ideal clients are identified, the advisor should then dig deep to learn about the client experience through the client's eyes. Conducting interviews with a handful of top clients, RIAs should ask questions like:
- What was your most memorable customer service experience, and what made it special?
- What organization or professional person has had the greatest impact on you, and why?
- How did you find that organization or professional? Did they contact you initially, and if yes, how did they do it?
- Can you tell me everything you can remember about this experience – both good and bad – and how you felt about it?
Be attentive to themes that show up in different interviews. Use these to develop interactions that appeal most strongly to the type of clients the firm wants to attract and retain.
3. Customize the client journey
Remain conscious that every client who comes to the firm enters a journey that continues through various phases. In fact, it begins before they contact the firm, as their different experiences, needs, and goals combine to create potential interest in seeking out the services the firm provides. Subsequent phases include initial contact, information-gathering (on both sides), onboarding, plan creation, plan implementation, periodic reviews, emergent requests or service opportunities, and ongoing communication.
At each stage of this journey, the client develops certain impressions, feelings, and opinions about the services provided and their value. Based on the information gleaned through client involvement, RIAs can design each step of the client journey – except for the parts that occur prior to initial contact – to reflect qualities and impressions that the clients will appreciate, admire, and remember. The goal is to build a consistent experience across all client touchpoints that incorporates what is most important and memorable from the client's perspective.
4. Stay innovative
Technologies that support client and colleague contact and collaboration have exploded since the pandemic. Stay current with trends and developments that impact client contact and client experiences, and pay special attention to those indicated as most meaningful for the firm's top clients. You should be continually asking yourself:
- How do my clients want to be contacted?
- How often do they want to hear from me?
- How can I ensure that client communications are answered promptly?
- How can I make each member of my team more sensitive and responsive to client concerns?
- Are there new trends or technologies I should be aware of?
Across various industries, innovative companies are offering customers choices in how they want to be communicated with, topics of most interest, and preferred frequency of contact. Based on what you now know about your most valued clients, your firm can do the same – and should. This goes beyond maintaining your social media feed and creating regular blog entries – though these are important, too. Every communication and contact tool you employ should be continually evaluated in the context of what matters most to your key clients. By doing that, you'll continue to set your firm apart as a place that provides truly exceptional client experiences.
Gretchen Halpin is the co-founder of Beyond AUM, which provides growth, client experience, and advisor experience support to financial advisors to drive business success. Over the course of her 25-year career, Gretchen has founded more than five businesses in addition to serving as the chief strategy officer for one of the financial services industry's leading wealth management firms. She has been featured in Advisor Perspectives, Financial Advisor Magazine, and Forbes for her insights and has served as a speaker at numerous industry conferences, including NAPFA, Financial Planning, and Invest in Women. She also serves as a facilitator in Financial Planning Association's Women and Finance Knowledge Circle community.