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Financial Planning > Behavioral Finance

4 Ways to Know Clients Better

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Generally, I’m not a fan of advisory business owners focusing on client niches. It seems to me that having a niche unnecessarily limits potential clients, and can narrow a firm’s marketing efforts.

That said, independent advisory firms do tend to have groupings of similar kinds of clients. These groups typically result from client referrals as a primary marketing strategy.

People tend to work with — and hang out with — others with similar jobs, so, it’s not surprising they would refer folks who are like themselves. 

Consequently, many advisory firms tend to end up with groupings of similar clients in age, occupation and income. These groups often include executives at the same company, doctors in the same practice or at the same hospital, and folks in the same industries, from owners of dry cleaners and moving companies to vineyards.

And yet, surprisingly — at least to me —few advisory firm owners actually make an effort to get to know and understand the various groups who make up their client base. This is a big mistake.

Knowing your clients is not only the key to providing them with financial services and keeping them as clients, it’s also essential to attracting and retaining other clients like them.

Here are some areas to explore so you can get to know your clients better:

Age Group

Although I’ve written a lot about understanding millennials, every generation is different: in goals, lifestyles, relationship with money and the way they want to get financial advice.

Accept these differences, and try to find out what clients in all generations are looking for from you.

Challenges in Their Lives

People face issues with their children, parents, relatives, or past spouses — ranging from medical to financial and anything in between.

Often these issues have a dramatic impact on their lives, and understanding what they are can help you understand your client.

Career Tracks

Don’t assume you know where someone’s career is headed — or where he or she wants it to go.

Some people want to end up in the C-suite. Others would be happy doing what they are doing now for the rest of their lives.

Obviously, their financial plans and your financial advice will be based largely on where they want to go — or stay.

Dreams and Games 

I’m not suggesting you become a life coach, but I believe you should look beyond traditional retirement models to find out what each client really wants — even if they don’t believe it’s possible.

Yes, many people have a hard time acknowledging what they want, but you need to ask to help them reach that goal.

Of course, the best way to understand your clients is to be one of them: Former business executives make the best advisors to business executives; former engineers make the best advisors to engineers, etc.

If you find yourself with one of these or some other specialized group, and you’re not one of them, the next best thing is to hire an advisor who has that background. As I’ve written before, this is a particularly good idea for advisory firms that recognize the vital importance of attracting millennial clients.

Finally, if you’re not a member of a certain client group, or you can’t or don’t want to hire an advisor who is, another idea is to simply hang out with them.

Have meetings over lunch. Play sports with them, like golf or tennis, or join clubs or charity organizations. Do anything you can do to spend some time out of the office with people who make up significant portions of your client base.

After all, the best advisors truly understand their clients. 


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