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What Works in Client Communications? Getting Personal

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One of the opportunities presented to advisors by the unsettled investment climate is client communication—how, when and what to say to clients. Most clients welcome information—on portfolio performance, potential investments, fees, market activity—but may rank the quality of advisor interaction higher than its length or frequency.

The latest AdvisorBenchmarking survey revealed the growth in more personal approaches to providing investment advice. Advisors reported they were spending more time directly with clients, whether in person or over the phone, while less-personal methods showed erosion. The use of telephone calls to clients, for example, nearly doubled from 51% to 96% in the past couple of years, while the occurrence of in-person meetings increased from 59% to 93%. Newsletter use, a more impersonal way of keeping in touch, dropped to 50% from 74%. 

The trend toward more personal forms of communication accelerated after the market crisis and subsequent recession, as advisors realized clients appreciated more “high-touch” communication when markets were undergoing turmoil. Advisors spending the most time with their clients are often in a better position to demonstrate their investment knowledge and convey their value, which may help strengthen relationships, increase referrals and boost assets.

Indeed, clients are generally more comfortable and more prone to continue a relationship with an advisor who can integrate the financial and personal dimensions into a practice—who can understand and address a client’s financial situation and attitude toward money, and do so with insight and discretion. 

That is not to say that advisors and their clients ignore more high-tech communications. About 47% of AdvisorBenchmarking respondents said they either use or plan to use social media in coming months. The main reason they give for not using social media is not its impersonal nature but their uncertainty over navigating compliance issues (47%) and their inability to measure social media’s effectiveness (27%).

Advisors may also find it difficult to quantify how much and in what ways social media helps the client-acquisition process. What they do know is that it takes time. Lacking staff to manage and maintain a social media presence showed the largest increase in our latest study of the reasons RIAs do not use social media.

Advisors interested in analyzing their communications program should recognize that many clients may not want more communication, or more frequent communication or even face-to-face communication. Clients lead busy lives, too, and value succinct discussions that get to the core of the relationship—that you are there to provide financial advice. Whatever method you use to communicate with clients, make sure it conveys professionalism, market knowledge and empathy. 

Advisors may also need to gain perspective on social media. Explore your own attitudes about social media and discuss these with clients. Do you assume that because you are not using Twitter or Facebook that your clients are not? Do they say they prefer emails or telephone calls or newsletters, or are those methods the ones with which you’re most comfortable? Try to find out how your clients like to receive communications, and then gain competency in many forms to satisfy the full range of their preferences.

However frequently or in what medium you communicate, make sure you are discussing the right topics with your clients. It’s easy to provide an account balance, list of holdings or breakdown of performance. The harder conversation may be to ask why a particular investment is in a portfolio and whether it should be. Recognize that trust between the client and advisor is often eroded most easily by lack of clarity on fees. Be transparent about the costs of your services, and encourage even long-time clients to ask questions about fees. 

Advisors need to continually ask themselves whether, when the discussion ends, they communicated effectively with clients. It doesn’t have to be particularly elegant, time-consuming or technological. But it should be intelligent, personal and sincere. Above all, let your actions do the talking, and demonstrate that your clients matter, letting them know that the strength of the relationship is a prerequisite to investment success.


AdvisorBenchmarking is a research and analysis center focused on the registered investment advisor (RIA) marketplace. Study results quoted in this article are based on the 300-plus RIA firms that took the online survey in March-May 2011. The service is aimed at helping advisors grow and enhance their firms by comparing how their businesses fare against other advisors. Advisors also learn best practices of the most successful advisors in the business.

AdvisorBenchmarking is an affiliate of Guggenheim Investments. The analysis on is based on the number of completed surveys and reflects only information from those surveys. This information is intended to be general in nature, and these overviews are no substitute for professional, legal or consulting advice. This information should not be construed as advice from Guggenheim Investments or any of its affiliates.


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