For years, I’ve read accounts about how financial advisors are at varying degrees of risk that deceased clients’ surviving family members will take their business elsewhere. I don’t recall ever seeing a definition of “financial advisor.” So, I’ll take some literary license and continue on my favorite theme of planning for merely well-to-do baby boomers and not the very wealthy. I’ll focus on the investment advisory firms, trust companies and others that provide that part of the demographic, among others, with investment management in the context of more comprehensive wealth management. I’ll leave to others the unique challenges of dealing with the very wealthy and their families.
I sense there’s no single reason why a client’s surviving spouse or adult children might move their money away from an advisor. Rather, it’s a mixture of dissatisfaction with the firm’s investment platform and/or performance, fees, administrative competency, communication, technology, wealth manager qualifications, turnover or maybe just an overall dissatisfaction with the client experience. In light of this risk, and with so many touch points of vulnerability to address, it makes sense to me that, if they haven’t already done so, these firms should take a hard look at where they are at risk, why and what they should start doing about it. This kind of introspection will be much easier said than done, mainly because it could pit the governance and business model of the firm against the expressed needs of its wealth managers to retain and grow the business.
Here are some thoughts about how a firm can do a preliminary internal risk assessment before bringing in the consultants. I highly encourage firm management to include their wealth managers in this assessment to ensure a high internal rate of reality in the discussion.
Our Platform
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Pretend you’re a prospect studying our website and marketing materials to learn about what we do and how we do it. “A Boomer Couple Goes Virtual Window Shopping for Advisors” can help with this. Does our platform speak to the interests, concerns and expectations of today’s well-informed prospects? If not, what do we need to refine and refresh?
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Does our service delivery platform live up to our marketing story, that is, is our firm set up and staffed to provide the level of wealth management services we purport to offer in our marketing materials? If not, where are the gaps?
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Is our investment platform as robust, dynamic and state-of-the-art as it should be in today’s world? If not, where and how are we falling short?
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Is our approach to portfolio construction adequately sensitive to the client’s tax situation? Do we reach out to clients to discuss year-end tax planning on a timely basis?
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Do our website and client portal enhance or detract from the client experience, meaning are they client-centric, user-friendly and sufficiently content-rich for a digitally oriented clientele? Does the portal offer enough information and insight about what clients own and how they’re doing? Do we offer the kind of planning tools that clients, especially younger clients, find helpful?
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Does our current rate of client attrition seem reasonable?
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How often do our clients refer business to us?
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Do we seek feedback from clients about how we’re doing? When we do get feedback, do we listen and follow up so they know we heard them?
Our People
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Do our wealth managers have the appropriate credentials for their advertised role as comprehensive wealth managers?
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Do our wealth managers go beyond investment management to show a keen interest in their clients’ overall situation and planning?
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As and when appropriate, do they introduce all of the firm’s expertise and resources into their client relationships? Can we show tangible evidence of that interest and resourcefulness to our prospects, i.e., can we show them a roadmap or timeline of how the client experience unfolds so they can see the full breadth and depth of the client relationship? A Boomer Couple Interviews Investment Advisors
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Does management adequately monitor our wealth managers’ portfolio construction and relationship management? How can we prove to prospects concerned about the quality of service and staff turnover that their fate as clients does not depend exclusively on their wealth manager’s approach, skills and biases?
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Have clients been satisfied with our referrals to other professional advisors, for example, estate planners and life insurance agents?
Our Administration
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Are we timely and accurate in the administrative aspects of our client relationships?
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Are we responsive to client inquiries about administrative matters?
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Do our periodic statements clearly tell clients what they need to know about their accounts and how they’re doing in terms they understand?
Our Programming
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Are our webcasts, information pieces, well done, relevant for and interesting to most clients, that is, are we talking about what they care about in terms they understand?
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Do our webcasts and other communications help our wealth managers promote conversations with clients about our services and resources?
There are no doubt many more topics that this kind of internal conversation would and should cover. Knowledgeable people would undoubtedly augment, reorder and rephrase my points. So, let’s consider this a start towards a worthy goal.
#Assess #Firm #Retain #Clients #Death