In fact, almost one-third of advisers surveyed by outsourced asset management provider SEI said that client relationship failures stem from a lack of understanding. The lack of communication is more detrimental than either poor investment performance or competitive pressures, the survey said.
Nearly half (41%) of the 100 clients of the SEI Advisor Network surveyed said that unrealistic expectations are at the core of bad client relationships. The lack of understanding between adviser and client is caused by many things, Steve Onofrio, head of adviser sales, service and support at SEI Advisor Network said, but most commonly it is either market-based, in that the client’s investments are not performing as they wanted, or a case of an adviser not communicating with the client or taking the time to understand the client’s real needs.
An adviser should reevaluate a client’s needs at each meeting, Onofrio said, and then, if necessary, change the relationship accordingly. Although every client has different communication expectations and requires varying levels of attention and support, about half (53%) of SEI’s advisers credited frequent, proactive and face-to-face contact as the top reason for their most successful and profitable client relationships. A successful adviser will anticipate clients’ needs before they ask; once a client has to ask, his anxiety level is already high, and an adviser will have to work that much harder to calm them, the survey suggests.
“Reinforcement and continual communication [with the client] is key,” Onofrio commented. Although advisers might communicate through newsletters or e-mails and phone calls, the most important thing is to take the time to sit down face to face with clients.
Growing the Practice
Fifty-one percent of advisers said marketing and new business was the number one way they would spend extra time in their work day. The key to maximizing marketing, Onofrio said, is to understand which strategy will work best for you and focus on that. He spoke of three successful advisers, each of which uses a different approach: one does an extremely successful seminar program that he has made into a science, Onofrio said; another has a radio show, and the third has a very active referral program. Each of these brings in tens of millions of dollars in revenue through their programs because, although different, they each bring a standardization and discipline to their process.
Winning New Business
Half of advisers surveyed said that differentiation is the key to winning new business. In order to differentiate yourself well from competitors, Onofrio said an adviser must first take inventory of what he does well and from there develop his target market and ideal client profile. “Everything [advisers] do should be measured,” he commented.
In order to know what your strengths are, he suggests taking a survey of clients. Clients are the key to understanding how what you deliver is actually received in the marketplace. The better advisers survey their clients on an annual basis, Onofrio commented, and they then use those surveys to further develop their business. This allows you to spend time trying to get a client that fits your ideal profile, rather than spending time pursuing clients that will not fit well with your practice. Pursuing clients that fit that profile leads to less administration and happier clients. You are also then more likely to get recommendations and referrals to other clients that will fit your mold, Onofrio notes.