I used to be a big advocate of advisory firms writing out their “processes and procedures” in detail, step by step. But with the advisory industry changing so rapidly these days, I find that firms are having to rewrite those processes and procedures every couple of months or so so—and it’s becoming a burden.
Instead, I’ve found it’s both more efficient and more effective to shift the focus away from specific steps to take with each client, and onto the overall experience that you want your clients to have.
Yes, it’s important that all clients be treated with respect, and kindness. And that their calls are answered quickly and their problems and/or concerns be addressed promptly and effectively.
Yet, over the years, I’ve come to realize that these actions are part of a bigger picture of your clients’ experience — building client trust.
In general, we build trust with people by showing that we are genuinely concerned about their happiness and well-being. And that’s certainly important in advisory relationships.
The first step in creating client trust is to talk about what “trust” is and why it’s important.
It’s also important to remember, that most clients have no understanding of how the financial services industry really works. Explaining those hidden pitfalls and what you do to help your clients avoid them can be a big trust builder.
These days, many advisors demonstrate this concern by committing to a fiduciary duty to act in the best interests of their clients—ahead of their own interests.
And it’s important that advisors communicate how that duty translates into their actions on behalf of the clients: by avoiding conflicts of interest when possible; disclosing and mitigating conflicts that are unavoidable, and working to keep investment costs and risks as low as possible, while still achieving the clients’ goals.
The second step toward building client trust is to talk about what their experience will be as clients. Thoroughly explain everything you do on their behalf (and that of other clients), and why you do what you do, and the way you do it.
Then talk about what their experience will be, step by step: from information gathering to the services you’ll provide, the reports and documents they’ll receive and when, and how their meetings with you will be structured.
Third, allow each client to have their own experience and journey.
Remember, the key to good client service is keeping the client happy. Thus, it’s important to not get so attached to your service model that you don’t modify it to address specific client wants and needs.
I realize that you don’t want to be so flexible as to hurt firm efficiency. But within reason, try to give each client what they want and need.
Finally, as with other professions, financial advisor/client relationships have another dimension: Clients want to feel that their advisor will be there for them when they need them.
Common client concerns arise when they have a major change in their lives (job change, inheritance, new baby, divorce, etc.), when they are thinking about making a change that wasn’t part of their financial plan and — perhaps most commonly — when the markets take a major downward turn or they’ve heard a prediction that they might take such a turn.
While some of these concerns may not feel very worrisome to an advisor or their staff, it’s important to keep in mind that if they are worrying the client, they need to be taken—and addressed—seriously.
How you and your staff react to these client concerns will go a long way toward establishing their degree of trust. As in other relationships, client trust is built over time, step by step.
It depends on each member of a firm consistently treating clients with the importance and respect they deserve, including transparency about fees, costs and risks. It also means clients experience their advisor being there for them during their times of greatest need.