Gold Medal

As a registered investment advisor (RIA), you are in the business of serving your clients’ financial needs–and it’s no exaggeration to say that the quality of the service you provide will go a long way toward determining your firm’s success. Clients expect the basics to be executed flawlessly: every telephone call and e-mail returned promptly, high-quality advice and expertise provided regularly, ongoing meticulous record-keeping and organization, frank admission of rare mistakes, as well as being treated with courtesy and respect.

These fundamentals are essential but insufficient; exemplary advisors go well beyond the basics to deliver a level of service that consistently surprises and delights. In today’s competitive market, it’s worth asking yourself whether you are doing everything you can to exceed your clients’ expectations.

Industry research regularly finds that RIAs in general do a better job of satisfying client needs than wirehouses, banks, or other financial institutions. The McKinsey report, Winning the Retirement Race: Consumer Retirement Survey 2007, found that consumers are most satisfied with independent advisors, and that independent advisors more successfully engage, serve, and retain clients because they give consumers what they want–an advisor who is responsive and timely, who provides comprehensive services with objectivity and simplicity, while transparently disclosing the fees for those services.

This should not give independent advisors license to pat themselves on the back and call it a day. The competition for investor assets is real, and there are RIAs with service efforts that are especially effective and personal. These advisors enjoy superlative client retention rates and a strong pipeline of new assets and clients, regardless of market conditions. What makes these advisors exceptional?

In April 2008, Focus Financial Partners tried to find out. Our internal investor satisfaction survey across our partner firms revealed that more than 90% of clients rate their advisors overall as “very satisfactory.” To find out what differentiates the standouts, we conducted in-depth interviews with several elite advisors and their clients about their client service methods. These conversations revealed that an institutionalized commitment to personal and high-touch service practices is what enables these advisors and their firms to delight their clients at every turn.

Different phases in the client relationship call for different approaches to service: a new client requires services and attention that are distinct from one who has been with you for decades; clients going through major life changes have very specific needs related to that change. The advisors with whom we spoke elaborated on the ways they address the needs of their clients at each stage.

Stage 1: Early Engagement

Clients chose a new advisor usually because they are not satisfied with the service they have received elsewhere, or because they feel they can no longer do this themselves and it is time for their assets to be managed by a professional. Getting the relationship off to the right start with truly exceptional customer service tactics from the outset will set you apart from your peers. Consider the following to “wow” new clients:

Get on the same page. It sounds obvious, but make sure you and your clients are compatible. After all, exceptional service won’t mean much to a client who fundamentally disagrees with your philosophy on investing. Bert Schweizer of Buckingham Asset Management in St. Louis says his firm spells out the Buckingham philosophy and approach plainly at the first client meeting, “We’re believers in market efficiency and use passively managed mutual funds,” he says. “If someone wants an advisor who’ll trade stocks, we’re not for them.”

Ron Lara of Lara, Shull & May, in Falls Church, Virginia, and Frisco, Colorado, works with new clients to craft an explicit vision statement. “A client might say, ‘I want to purchase a second home, have $15,000 a month in spending money in retirement, and set up a foundation for my children to manage,’” he says. Recording client goals at the outset helps to define appropriate financial strategies, and provides a benchmark for gauging future progress.

Founders Financial Network in Cupertino, California, works with several Silicon Valley executives who have come into wealth as the result of a company sale or IPO. Advisor Bob Kresek starts by helping them determine how much wealth they will have to invest, and helping them define their needs today as well as in the future.

Make a quick and easy transfer. Clients may come to you after realizing that they don’t have the time, expertise, or inclination to manage their money effectively. Perhaps they have just terminated a relationship with a broker who recommended trades or investments that were not in the client’s interests. They might have come into newfound wealth. Whatever brings them to you, new clients are likely to have messy finances.

It’s important to get their financial house in order quickly while beginning to establish trust and rapport. The new advisor should transfer as much of the client’s assets as possible to their management as soon as possible so that they can get a snapshot of the client’s financial picture, which is essential to coming up with a plan that suits that client’s needs. As many advisors know, however, this is often easier said than done.

The asset transfer is often a paperwork-intensive and tedious process that can present a challenge to a new client relationship. Advisors with whom we spoke stressed the importance of making this transition as easy and painless as possible. Tim Pinch at GW & Wade in Wellesley, Massachusetts, and Silicon Valley, California, sends his associates to new clients’ houses to assist in finding the appropriate documents, if needed. His team organizes paperwork carefully to minimize the time and attention clients must devote to it.

Put out fires. With the transfer complete, look to identify and address immediate concerns. Such problem areas frequently involve inappropriate or outdated estate or tax planning. Common discoveries–such as finding ex-spouses still listed as the primary beneficiary on IRAs, or uncovering an opportunity to file an 83(b) election to save on future taxes–can be resolved quickly and have multiple benefits, not least of which is establishing trust in your expertise and your focus on the client’s needs.

Get familiar with each other. Successful advisors meet frequently with new clients. Regular meetings early in the relationship allow the advisor to reshape the client’s finances, while familiarizing the client with the advisor’s methods, reports and other elements of their practice. Tim Pinch schedules the first few meetings with new clients at short intervals–four to six meetings in two to three week intervals–and supplements those face-to-face meetings with regular phone calls. The frequency of face-to-face interaction and ongoing telephone dialogue provides the opportunity to align every aspect of the client’s financial picture and to build relationships with each member of the GW & Wade team that will support the client.