The wild gyrations that have characterized the market this year should be a stark reminder to financial advisors of the importance of having a defined communications plan in place if they want to retain the assets of anxious clients.
Timely Communication is Biggest Unmet Need of Clients
According to a study of high net worth clients by the Oechsli Institute, their biggest concern with their existing financial advisor is contact and communication, specifically more timely responses to market events. The study found that clients with $250,000 to $10 million in investments are more concerned with receiving clear, timely communication than with investment performance.
The same study also found that more than a third of wealthy clients are not satisfied with their current advisory relationship and nearly half work with, or have considered, working with more than one financial advisor. This should put financial advisors on notice that their client relationships are at risk as long as their clients’ most important needs are not being met.
The good news is that while clients would always like to have more access to their financial advisor, they would be perfectly happy if they received the timely information they need through live communications.
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Getting Ahead of the Communications Curve
Client relationships grounded in strong communications are more likely to survive all types of risk in investment. In an age when information travels at digital speed, a solid communications plan should include the following key elements:
When communications are churned out without regard for the format, frequency and content preferences of the client, it is likely to be viewed as nothing more than noise. To maximize the value of client communications, it is important to ensure the right content is sent to the right person at the right time and through the right channel.
In these times of increasing market volatility, communications sent to your clients should have a clear message that anticipates any questions your clients might have. While it’s not possible to predict future market events, it is possible to have an archive of policy responses available that can be tailored for events as they occur.
Clients have their own preferences for how, when and what they want to receive communications. Send out an email asking your clients the different ways they can receive updates on market events. Some will want to receive a call, text or email, while others would be fine with a link to your website with the update waiting for them. At a minimum, you can deliver communications through multiple channels to allow clients to control the type and flow of information.
With data analytics software integrated with your email system, social media and website, you can track your clients’ activities to see what communications they look at and their level of engagement with your digital tools. Clients with a low level of engagement (not opening your emails or visiting your website) may be on their way out the door. Time to give them a call.
With information being disseminated 24/7 at digital speed across multiple channels, there is a clear expectation up and down the communication chain of timely and clarifying responses in times of market uncertainty or turmoil. The ability to meet that expectation is one of the main differentiators for financial advisors, more so than investment performance according the Oechsli study.