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4 Steps to Building a Client-Centric Financial Advisory Team

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High-performing financial advisory teams have a strong client-centric philosophy, according to Russell Investments, which offers practice management guidance to advisors.

A client-centric philosophy is reflected in a team’s segmentation, service models, workflow processes and team composition.

Sam Ushio, practice management director for Russell Investments’ U.S. advisor-sold business, recently set out four steps advisors can take to build a client-centric organization and maximize their team’s effectiveness: Segmentation

1. Segmentation

The first step is to establish strategic segmentation based on unique client factors. This involves two considerations.

Clients have differing perspectives on value. This, Ushio says, should prompt advisors to segment their client base into groups according to their preferences and provide service models that reflect those preferences.

In order to do this effectively, and given that a majority of profit/revenue tends to come from a handful of clients, the advisor must be aware of both the revenue each client is currently generating and the future opportunity that client represents.

Ushio cites the example of a 40-year-old versus a 60-year-old client. Both may currently generate the same revenue, but in 10 years’ time, the revenue projections will likely be very different as one client accumulates assets while the other draws assets down.

Service model

2. Service Model

The second step is to create a proactive service model that reflects the unique characteristics of each segment, and that is also efficient and scalable to deliver. Ushio says this requires a concerted effort by the entire advisory team and ongoing diligence.

Absent a service model tailored for a particular segment’s preferences, the advisor will miss an opportunity to deeply connect with the client.

Workflow

3. Workflow

After segmenting the client base and creating service models appropriate to each segment, the advisor must design internal workflows to ensure that the firm can adhere to the segmentation model and deliver on the promises of the service model.

Moreover, the workflows should be able to quickly and easily adapt to constantly changing client needs and conditions. Team Composition

4. Team Composition

Finally, clearly defined responsibilities can help team members achieve mastery and potentially expand their client-centric effectiveness.

An operations manual that lays out the firm’s resource requirements and focuses on the key client segments and their corresponding service model can provide clarity for team members: what tasks need to be accomplished and by whom.

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