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Six standards of client communication in a downturn

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Q. How do you develop meaningful ways to connect with clients – in good times and in bad?

A. Thirty percent of consumers in the U.S. have expressed they want more communication from financial institutions regarding the economic crisis, specifically. What can advisors do to better communicate with boomer clients about what’s going on?

Communication is one of the simplest, yet most powerful tools advisors have to strengthen and grow their relationships with clients, especially during turbulent times. But a monthly statement or a phone call here and there isn’t enough to build the kind of client relationship that will endure challenging markets. Instead, advisors need to develop meaningful ways to connect with clients and make communication a priority — in good times and in bad.

Because research shows that how you communicate is just as important as what you’re saying, even the truest, most sensible messages can fall on deaf ears if they’re ill-timed and ill-delivered. The following are a few things that are critical to communicating with clients effectively:

1. Focus on goals. When it comes to investments, performance is important, but what really resonates with clients is how investments impact their goals and needs. Frequent communication (and re-evaluation when necessary) about clients’ goals will help drive productive discussions and diminish impulsive urges clients may have. In the end, it’ll force your client to realize what’s really important instead of succumbing to the paranoia of market chatter. We’re hearing from advisors that the last few months have been an opportune time to discuss and reevaluate clients’ goals, time horizon and risk tolerance. By focusing on the full wealth picture, negative performance numbers of the last year aren’t the only thing clients focused on.

2. Proactivity is key. Whether they come from the media, the web or the water cooler, all of the economic and financial predictions and media hype swirling around are enough to worry any investor. To be a trusted advisor in this environment means you need to communicate with clients regularly and proactively so the rumor mill doesn’t get to them first. Even if your client’s not the type to panic, demonstrating that you’ve always got their business top of mind can help keep your relationship on solid ground. To make this a more manageable part of the process, most successful advisors have a year-long communications calendar with topics, dates, formats and responsibilities.

3. Variety is the spice of life. With technology options today, consumers want to consume information in different ways, so explore multiple formats for communication. We recently helped advisors create videotaped commentaries, featuring the advisor discussing trends in the financial markets. The video lives on a website or can be blasted out to an entire client and prospect base by email. Another great tactic is hosting a breakfast/lunch/late day seminar with clients to discuss what’s going on in the markets. It provides a relaxed setting in which clients can interact with you and others like them about big picture issues they’re facing.

4. Speak their language, not yours. Sure, clients want to know their advisor is an industry expert, but complex market scenarios can be too complicated for even the most sophisticated investor to grasp. Be mindful of striking a balance between educating clients about what’s influencing economic trends and — more importantly — how it impacts them directly. Avoid conversations that are laden with industry jargon and speak in common terms.

5. Get real(istic). Everyone from Wall Street to Main Street has a prediction about when the markets will rebound, and odds are, your clients are wondering who is right. While it’s tough to predict the future with any certainty, with constant communication, you can reassure them you’re keeping a close eye on their options. Avoid focusing on when the market will recover and focus on their full financial picture, addressing more immediate needs like cash flow for the next two years and other shorter-term planning items.

6. Know the facts. In addition to understanding current trends and industry opinions, knowing the historic cycles of the markets can ease some of the uncertainty clients have about the future. While you won’t be able to predict when this latest downturn will end, you can provide some comfort in explaining what’s happened before. Doing so will also emphasize your experience, demonstrate that your perspective extends well beyond the walls of your office, and ultimately reinforce trust.

Your words won’t make the current economic crisis turn around … but they might help reassure your clients until it does. Take time to develop a communications plan that works for you and for your clients. It’ll take some effort, but in the end, it’s a return on investment you can count on.

Jerry Lezynski is Director of Marketing for the SEI Advisor Network. He is responsible for the overall strategy, development and execution of marketing and communications initiatives for the firm’s more than 6,500 independent investment advisors.

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