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Gold Medal

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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.

Involving the various members of your team during this process can help familiarize clients with your staff and external partners, and will help them begin to appreciate the resources you bring to bear on their behalf. It also allows you the flexibility of not being “the person” on call for every client question or need.

Make it clear to your clients that your team is there for them at all times, and explain who will work with them on which issues. Lara, Shull & May provides new clients with welcome packages that include contact information for all team members, and explanations of each team member’s areas of responsibility.

The process of aligning your philosophy with clients, transferring assets, and addressing immediate concerns through multiple touch points in the early stages of engagement ultimately results in a strong foundation for your relationship with the client.

Stage 2: Long-Tenured Clients

The relationship is established, the plan is in place, and everything is running like clockwork. Now is the time to downshift into a service level that’s defined by quarterly statements and an annual client meeting, right? After all, by this point, clients surely know enough to call if they have questions or issues, correct? Wrong! While contact need not be as frequent with long-term clients as it is with new arrivals to your practice, established relationships should not be neglected. Make sure you take these steps:

Meet on their terms. The frequency with which you contact these clients, and the manner in which you contact them, should vary based on each client. Advisors with whom we spoke stressed the need for at least one annual face-to-face meeting at a minimum to review financial plans, changes in the client’s situation, and progress toward their goals.

Some clients simply will be too busy or may live too far away to come to your office. In such cases, you can demonstrate your commitment by traveling to them. Although he’s based near Boston, Tim Pinch travels to San Francisco once a quarter to meet with a client of 17 years. “Tim has come out just to meet with me on occasion, when there has been a specific need,” says the client. “It means a lot to me that he is willing to make that effort.”

Most RIAs provide quarterly newsletters to supplement statements. Providing exceptional service requires taking these standard steps to another level. Your understanding of your clients should tell you which of them need or want contact from you more regularly. Pinch appends personalized notes to the newsletter for some clients to explain how the big picture in the financial markets affects them. He also calls some clients the day after he sends out their quarterly statements to offer reassurance or to answer any questions.

Meet their needs–not someone else’s. Each client is different, so each client’s plan should reflect his or her unique situation. This attention to the individual is a hallmark of optimal service. “My advisor didn’t push a one-size-fits-all plan on me,” says one client. “He tailored it to me, and he gives me additional services whenever I need them. He makes strong recommendations–but I always make the final decisions. Working hard at my job made me rich, but my advisor helps keep me rich.”

Incorporate the family. Ron Lara offers to hold family meetings for his clients. “Family meetings are fantastic for helping the whole family stay informed about important issues, and they give children the peace of mind that their parents’ financial affairs are in order,” he says. Lara notes that the vast majority of clients’ children remain with his practice after the parents pass on.

Show your appreciation. Tokens of appreciation go a long way in solidifying any relationship. When clients provide multiple referrals, GW & Wade sends them to dinner at a favorite restaurant, or gives them tickets to an event they’ll enjoy. Buckingham Asset Management gives gifts or makes donations at clients’ birthdays, the births of grandchildren, and other special events.

Stage 3: Specific Life Events

You know that your team of professionals allows you to serve multiple client needs, but do your clients are aware of this, too. Every advisor hopes their clients call them first to plan for predictable developments or for help in reacting to unexpected events. Exceptional advisors take steps to make sure this actually happens.

Anticipate what you can. Regularly consider the services your clients can benefit from, and use annual or semi-annual meetings to present forward-looking recommendations, which may include long-term care insurance, establishing trusts, crafting a business succession plan, deciding when to sell a primary residence, or choosing where to buy a second home. The clients with whom we spoke emphasized that knowing their advisors were actively anticipating and forecasting for such life changes greatly increased their peace of mind.

React immediately to unforeseen events. Anticipating and preparing for your clients’ needs encourages them to contact you when the unexpected happens, be it the sudden death of a spouse, an illness, or a divorce. At these times, your clients’ finances are likely to be the last thing on their minds and they will appreciate knowing that they can leave financial matters in capable, trusted hands. “My clients want to understand what life will look like after major life events like divorce, sale of a company, and so on. I help them visualize this,” says Marty Resnick of Resnick Investment Advisors in Westport, Connecticut. “I want to be the go-to guy for everything.”

Summing up, providing your clients with exceptional service encourages them not only to stay with your practice, but to entrust you with more of their assets. Additional assets in turn provide additional opportunities for you to deliver exceptional service–creating a virtuous cycle of client retention and growth. What’s more, a high level of service can help you grow your business, as satisfied existing clients provide referrals and evangelize on your behalf. “My advisor’s attentiveness and reliability mean a lot to me,” says one client. “At this point, I wouldn’t make a financial decision without consulting him first.”

Ruediger (Rudy) Adolf is founder and CEO of Focus Financial Partners, a leading international partnership of independent, fiduciary wealth management firms. He can be reached at [email protected]. Rajini Kodialam is a co-founder and senior VP of practice management at Focus. She can be reached at [email protected].


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