Reconsider Your Practices for Improved Client Outcomes

Key changes and questions can go far when engaging with clients.

Janus Henderson hosted a webinar to discuss how financial advisers are building better client and retirement outcomes in 2021.

Panelists on the webinar discussed how last year’s virtual environments affected financial advisers and their clients. The shift to phone or web calls added a layer of personal touch that’s not always possible with in-person meetings, said Meghaan Lurtz, a senior research associate at who also lectures at Columbia University, Kansas State University and the University of Maryland. There are more opportunities to check in and clients are more likely to reach out with virtual meetings or phone calls, she added.

“In many ways, telemeetings are just convenient,” Lurtz continued. “Being able to hop on a call with a client when they really need you is very powerful.”

However, the shift to online communications has its downsides. For one, it can remove the connection a financial expert and client typically get with face-to-face contact. Whereas in-person sessions allow both parties to pick up on verbal or non-verbal cues, such as head nodding or eye contact, it’s harder to get those cues in tele- or virtual environments.

“If your mic or video is off, we lose that ability to connect with others around us,” Lurtz pointed out.

Additionally, clients can zone out during a call, and it becomes tougher to actively engage with other members.

To avoid these issues, financial advisers can create a list of to-dos, including organizing a “tech check” with clients who do not understand how to use video platforms and practicing troubleshooting, Lurtz said.

Additionally, advisers can consider creating calm backgrounds for on-camera meetings. How your home office is arranged can alter how clients are thinking about their finances. For example, studies have shown that therapy office environments are more favorably received than traditional financial services environments. Consider adding a couch, bookshelf or even a visible painting to your workplace, Lurtz recommended.

Outside of virtual interactions, experts discussed planning for longevity and appropriately investing for the future. A Health and Retirement study from Morningstar revealed that while individuals have a “decent” sense of their longevity, many respondents made significant errors to their estimates.

For example, those who indicated that they thought they had a 0% chance of surviving to age 75 actually had about a 50% chance of survival. Those who gave a 100% probability only had about an 80% chance, said David Blanchett, head of retirement research at Morningstar, who also authored the study. “In the grand scheme of things, people do not have a great concept of how long they will live,” he said during the panel.

Financial advisers are not much better at assessing longevity either, he added. According to the research, fewer financial advisers are customizing retirement end age assumptions or personalizing retirement timelines. In the research, Blanchett noted that about 70% of plans use a retirement end age of 90 while 20% use age 95. Additionally, the research found that, on average, advisers were not capturing the “tail” risk associated with married households.

“When there are two people, you’re focused on the probability that one person can live for a very long time,” Blanchett said.

Lurtz agreed, recommending advisers seriously engage both people in a partnership. Staying away from a “one-size-fits-all” approach and personalizing these accounts will lead to enhanced outcomes for the household and the advisory business.

“If you can’t get both clients engaged, it negatively impacts your business,” Lurtz said. “If the client who was disengaged ends up living longer, they might not feel like they can connect with you and they could move their business someplace else.”

Blanchett urged advisers to consider personalizing a client’s account by re-evaluating the questions that are being asked and the language the account uses. For example, asking clients if they smoke or if they are healthy will provide more accurate longevity projections than asking the length of time they expect to have retirement income for.