Demonstrate Your Value to Clients from this Financial Planning Study

Key to SuccessI’d like to share one of the best articles I’ve read in a while by Deena Katz from Financial Advisor Mag.

In this article, ‘Communication Dynamics’ she writes,

“What we do in the service business—any service business—is sell something that a client cannot touch, see or feel. Many times, he can only judge, years later, how effective or valuable our service has been. And because our work is intangible, our relationship is fragile unless we successfully make this “invisible work” visible. It doesn’t break down until it breaks down, and when it does, it becomes something very personal. For example, when the client’s air conditioner acts up, he blames the unit; when his portfolio is volatile, he blames you. So while we are patting ourselves on the back for the good job we are doing, we aren’t working on improving our communication processes or making them more effective and less invisible. “

And that’s the key isn’t it?  As in any service business where there isn’t an absolute product (if you can count the 60-80 page Financial Plan document as a product).  The value of the relationship, the value of demonstrating something that’s valuable IS the key to communicating well and synergistically a way to retain existing clients.

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The Invisible Work of Financial Advisors

Deena talks about the “invisible work”.  From the Financial Advisors that I’ve surveyed so far, the key area of concern from the advisor is this the desire to want to demonstrate the value that is done by herself on behalf of the client that they don’t normally see.  The key to demonstrating your value proposition is one of the following to improve the communication processes and to illuminate the work that you do that is done in the background (that the client doesn’t really know about.)   And the communication of this is the more important part because by demonstrating the value that you bring, clients don’t waiver with the volatility in the markets and tend to stay the course and stay with you.  The fragility and uncertainty of the markets need not translate to your practice.

Communication is Key for Financial Advisors

Screen Shot 2014-09-14 at 3.19.26 PMMichael Kitces talks about this in a recent blogpost as well and uses the same source as Deena.  This all stems of the research conducted by the Financial Planning Association (Trends in Client Communication).  The key to demonstrating value is through effective communication which has four tenets:

  • Must be meaningful
  • Profitable to the practice
  • Defined in a manner that is standardized and automated
  • with the expectations of the communication strategy clearly laid out at the outset of the relationship

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Interested in a Simple System to Communicate your Client's Financial Plans, schedule a demo to see MyPlanMap in action.

To Be Meaningful

To be meaningful means goes beyond being just personalized and customized.  This is where client segmentation comes in handy, but I argue that we need to go beyond that.  As we uncover in the KYC process, the goals/desires/preferences are uncovered to culminate into what is an action plan during implementation with the client.  So the communications process is in many ways, more critical between the in-person meetings you have with the client and that it has to remain meaningful.  This often means it has needs to be granular enough to be relevant to their particular plan and not just that client segment.  It needs to be at the level of their individual actions in their plan.

Another way to put it is that it needs to be highly relevant.  Meaning that there needs to be a way to ensure that that timing of that communication is precise and planned.

To be Profitable

This is where the FPA study talks about client segmentation and how to maximize it’s potential.  This is more of a process to ensure that the communications can go out to the right people and with the right type of priority and focus in your practice.  I would that is useful to segment based on how you and prioritize your service, but I would say that for most advisors, we’d like to not just pick and choose, but be able to service all our clients.  Communicating to them need not be a trade-off between priority and profits and that really is something where technology can really assist financial advisors in leverage their time to lower costs to service ALL their clients.

This is made possible because of the ability to standardize and automate…

Simple System to Scale Highly Effective Touch-Points to your Clients.

Interested in a Simple System to Communicate your Client's Financial Plans, schedule a demo to see MyPlanMap in action.

To be Standardized and Automated

There is a saying on communicating effectively and it goes something like this:

“Tell them [your clients] what you are going to tell them, tell them it, then tell them what you told them.”

It doesn’t work for every context, but the general idea is well heeded.  The idea is that to communicate effectively you need to set the expectation of the engagement by providing a communication plan.  This is none more important than in the Implementation Phase where all you do is communicate!  So setting the communication plan up is a key factor in the financial plan as well.  The automation part is where it can help with the earlier 2 tenets of effective client communication to make it highly meaningful, delivered at the right time and is done at a cost that is profitable where it leverages your time well.

If you’re interested in a Simple System that can Deliver Meaningful, Profitable, Standardized Communication to your Clients…Sign Up for a Demo of MyPlanMap – Engaging Clients at Scale…

Simple System to Scale Highly Effective Touch-Points to your Clients.

Interested in a Simple System to Communicate your Client's Financial Plans, schedule a demo to see MyPlanMap in action.


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