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Like it or not, there’s a consumer-facing nature to the advisory business with the “consumer” obviously being the client.
Advisors shouldn’t be daunted by that. After all, they signed up for it and without clients, there’s no advisory industry to speak of. Experienced advisors know that the more satisfied clients are, the more likely they are to be long-term clients, recommend the advisor to colleagues and friends and encourage their heirs to remain with the advisor after they pass.
That is to say soft skills matter and it goes without saying that knowing what clients are looking for is important, too. Something that is of equal or greater value: Knowing what clients are NOT looking, what irks them and what can turn them into former clients.
Advisors need not fret because some of the things that perturb clients are easily fix and require little to do so.
Behaviors Clients Detest
Recent research by Morningstar turned up 15 frequent “misdeeds” committed by advisors. The research firm proceeded to polls clients on the ones that most upset them. Perhaps not surprisingly, failure to adequately and clearly articulate fees topped the list.
That was followed by advisors taking more than a week to accomplish tasks and next up was using too much financial jargon. As an advisor, put yourself on the receiving end of those behaviors. It’s not attractive, is it?
“Some of the advisor behaviors we investigated in our research may seem harmless on the surface but can lead to disastrous wounds over time,” notes Mornigstar’s Samantha Lamas. “It’s all too easy to wave off these results, with the claim that you (as a financial advisor) don’t do these things to your clients. Other advisors use financial jargon that leave clients confused or speed past investment explanations. Not you, of course. Unfortunately, we find more than half of the clients experienced each of these behaviors with their own advisors—making these behaviors a lot more common than any advisor should be comfortable with.”
Next up on the list are investment-specific mistakes committed by advisors. Interestingly, these aren’t directly related to performance. Clients, not surprisingly, aren’t keen on advisors pitching investments without going into detail about the idea or product.
Likewise, more clients are frustrate by advisors that propose investments that don’t align with personal values. That’s something to put added emphasis on when working with younger clients.
Something Else to Avoid, One to Embrace
The other two factors that drive clients away are cumbersome paperwork and practices that are not holistic. More technology, including artificial intelligence (AI) can improve efficiencies and reduce paperwork.
Second, broadening a practice’s offerings is to the benefit of principles too because it can increase revenue and client satisfaction. Fortunately, advisors can easily and swiftly take steps to bolster client satisfaction.
“The first step is a checklist that advisors can use before and during a conversation with a client, so they can reflect and address the top five disliked behaviors we found in our research,” concludes Lamas. “Step two is a follow-up survey template that advisors can send to clients after a meeting. The survey subtlety asks the client if they experienced any of the top five disliked behaviors during their meeting with their advisor. Compared with being face-to-face, the online format of the survey may encourage honest feedback; instead of being put on the spot, clients have time to reflect on the meeting and provide comprehensive feedback.”