Closer Client Relationships Drive Greater Growth and Satisfaction

According to FPA, financial planners who engage in “know your client” behaviors gain deeper personal fulfillment from many more of their client relationships.

The level of interpersonal knowledge financial planners have about their clients directly correlates to their potential for success, according to a new “Know Your Client” survey report.

The Financial Planning Association created the survey report in collaboration with Capital Preferences and T. Rowe Price, seeking to identify and promote the behaviors and techniques financial planning professionals can leverage to learn more about their clients. The report suggests some 80 behaviors that advisers may implement to boost their interpersonal relationships with clients. 

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According to the survey report, helpful “know your client” behaviors range from speaking broadly about client’s life goals to promoting frank discussions about how clients view their family dynamics and relationships. The survey report says financial planners who engage in these behaviors gain deep personal fulfillment from 60% more of their client relationships. At the same time, this group of advisers sees substantially higher referrals and growth, to the degree of enjoying 56% higher client willingness to recommend and 72% higher net client growth rate.

FPA says planners who actively identify misalignment between what clients say and what their behaviors show—and constructively resolve those gaps with their clients—report higher success on a variety of metrics. Notably, the survey found that planners who pinpointed this disconnect had almost triple the client growth rate compared to those who did not and double the referral rate.

Other findings show “know your client” financial planners spend more time directly engaging their primary clients’ partners and adult children, and they are 40% more likely to discuss aging-related lifestyle transitions and cognitive decline with their clients and their families.

“This study clearly redefines what it means to ‘know your client’ and how understanding their behaviors is highly correlated with solidifying strong, lasting client relationships built on a foundation of understanding and trust,” said 2018 FPA President Frank Paré.

National Retirement Security Week Starts October 21

The National Association of Government Defined Contribution Administrators (NAGDCA) is offering free, ready-to-use participant communication materials.

The U.S. Senate unanimously approved a bipartisan resolution supporting the goals and ideals of National Retirement Security Week.

The Senate first passed a resolution for National Retirement Security Week in 2006 at the request of the National Association of Government Defined Contribution Administrators (NAGDCA). In the resolution, S. Res. 654, the Senate calls on states, local governments, school districts, universities, nonprofit organizations, businesses and others to observe National Retirement Security Week October 21 through October 27.

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NAGDCA continues to develop and promote free, ready-to-use communication materials for plan sponsors to use with their employees, and for employees to share with family and friends. NAGDCA’s “Your Whole Story” campaign and new Retirement Garden Edition video series apply “behaviorally effective” communication techniques to engage participants in becoming aware of their role in preparing for retirement.

The Retirement Garden Edition video series addresses retirement savings considerations according to early, mid- and late career. Early Career likens saving for retirement to planting a garden to emphasize the benefits of starting to save for retirement with an individual’s first job (compounding). Mid-Career focuses on the benefits to be gained from monitoring and adjusting portfolios, minimally increasing savings (annual-increase additive), and building an emergency fund to prevent the need for withdrawing funds from a retirement savings plan. Late Career reviews how to harvest retirement savings (withdrawal strategies) and, if needed, how to catch up on savings with a little Miracle Grow (IRS catch-up provisions).

“Communication directed specifically at individual needs can be a huge lever for change,” says Cindy Rehmeier, CFP, NAGDCA executive board president and manager of defined contribution plans at Missouri State Employees’ Retirement System (MOSERS).

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