Annual Client Reviews Work

What You Need to Know

Ensure beneficiary designations are updated and accurate.
Ensure beneficiary designations are updated and accurate.
And, a third time: Ensure beneficiary designations are updated and accurate.

Performing annual client reviews can be a great way for financial professionals to better connect with clients, reinforce their value and help grow their practices, recent research shows, yet some aren’t making the most of this valuable opportunity.

A survey of financial professionals and clients conducted by Jackson and Greenwald Research ahead of this year’s review season provided these and other insights on the value of the annual client review. The research polled 305 consumers who recently participated in a review and 305 financial professionals who recently conducted at least three reviews with clients.

The results showed that 80% of clients found annual review meetings extremely or very effective, and almost all said the sessions contributed to greater confidence in their investment decisions and reinforced their loyalty to their financial professional. On a loyalty-related note, four in five clients said the review meetings supported their willingness to make a referral.

Surprisingly though, many financial professionals report limiting the number of reviews they conduct to certain clients, which points to a significant missed opportunity, even if reviews don’t take place in person. In fact, a full two thirds of clients who met virtually said their financial professional understood their emotional issues, which defies the notion virtual meetings are impersonal.

The research also provided useful information on what traits lead to a quality annual review by asking financial professionals what’s important to ensure reviews live up to client expectations. Here are some of the common themes and best practices they shared:

1. Create a meeting agenda

Financial professionals consistently highlighted the importance of identifying topics to discuss before the meeting. Many suggested the agenda should be distributed to the client ahead of the meeting, which can help clients better prepare and provides them the opportunity to suggest additional topics. Half the financial professionals surveyed said they ask clients to re-state their short and long-term investment objectives at the start of an annual review meeting.

2. Communicate with the client beforehand

There was also a focus on collecting updated client information before the meeting, including tax returns, life insurance policies and other account statements. Some financial professionals reported sending clients a pre-meeting questionnaire in support of this goal.

3. Prepare specific questions and be an active listener.

Financial professionals know the best meetings are those where the client is comfortable speaking freely and expressing any concerns or worries. To encourage this level of interaction, they suggested asking open-ended questions, listening intently and following up with relevant questions. They also mentioned the importance of taking accurate and detailed notes to capture client insights and nuances of the meeting to refer to later.

5. Ensure beneficiary designations are updated and accurate.

Several financial professionals in the survey underscored the importance of asking the client if current beneficiaries needed to be updated. After all, life events frequently change family dynamics and ensuring this information is accurate helps show how attuned financial professionals are to this critical aspect of the planning process.

6. Follow-up after the meeting with an executive summary.

Follow-up is critical as part of the annual review process and, according to the survey, there is room for improvement. A third of financial professionals said they did not provide a written report to their clients, while over half of clients said this it was extremely or very important to receive a brief overview or detailed write-up within a few days after the meeting.

An Unheralded, But a Most Valuable Activity

It’s possible the annual review is so embedded in the traditional financial professional and client relationship that it has lost some of its luster over time and, with two in five clients surveyed meeting virtually, the pandemic has clearly changed the way many reviews occur.

What hasn’t changed is the fact that whether it’s conducted in person or online, a well-executed annual review is a valuable tool that savvy financial professionals can use to set themselves apart from the competition and underscore the unique value they provide.