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Portfolio > Economy & Markets

As Markets Improve, Holidays Prime Time to Re-Engage With Clients

By Spenser Segal

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As the markets improve, now is a great time to re-engage with your clients. While you are scheduling and conducting your end-of-year client reviews and 2011 client planning sessions, keep these thoughts in mind as you prepare your client meeting agendas.

Communication
Although the markets are improving, many clients are still nervous about the future of their investments and personal financial situation. Your task is to reassure people that you understand the significance of recent events, that you empathize with their concerns and that your advice is (if anything) more important than ever. Your clients trust you and want to know your overall opinion of the recession, what happened, what lessons were learned, and how these lessons will influence future decisions.

Remember to avoid jargon, maintain a positive and realistic attitude throughout your communication and limit references to other “experts”—especially those who are already in the media. Use your own voice.

Many clients have seen a decline in their portfolios but nonetheless are still on track toward their goals, requiring only minor adjustments. Others will need your help in revisiting their financial plans. If you identify and talk through a change process with concrete steps, then the client will be empowered to act, if necessary. Make sure you review past plans, so you can reinforce your earlier objectives and adjust if necessary.

Financial Planning
For advisors who provide planning as a fee-based service that is separate from investment management, now is the time to create premium value for clients. The careening up-and-down markets are beyond your control, but helping a client to plan for the “certainty of uncertainty” is well within your control. Be sure to stress this component of your value proposition in client communications.

Of course, not all advisors currently offer separate fee-based planning. As the economy and markets improve, now may be the time to consider introducing separate fee-based planning. Investigate this idea, as it represents a revenue stream that is tied to controllable value rather than the performance of the market.

“Crunch-Time Referrals”
Now is an exceptional time to reach out to many investors who either (a) don’t have an advisor at all or (b) have an advisor who they feel did a poor job in communicating during the financial crisis. Referrals are more important than ever as a means of communicating your value proposition, but how you explain that value proposition matters. The standard recommendation (“I’m happy with my advisor; they do a good job for me”) is not a referral. Here is an example of a great client referral:

“I had the same concerns you did about the market, and still do. I am working with an advisor that has a defined process. We set specific goals, measure progress against each goa, and quickly account for where the gaps are and how to respond. In fact, only one of our three discussions each year is specifically about my portfolio; the rest are about my goals and how I can plan for the unexpected. I sleep a lot better at night knowing that we are prepared for a wide variety of scenarios.”

Anxiety and emotions are still high these days, but your confident presentation of a well-defined planning process—one that addresses all market environments—is exactly what prospects need to hear today. Make sure that you’ve documented your process in an easy-to-understand manner, and consider using work-flow charts that graphically illustrate your decision-making process. This logical approach will help alleviate some anxieties and position you as a trusted advisor. Remember: Keep it simple.

By communicating with clients, reinforcing your process-based value proposition, and enhancing referral opportunities, you not only can reinforce the smart decision your existing clients made by staying with you during the crisis, but you can in fact grow your business as well.

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