By Dave Coffaro
Success as a wealth adviser comes from earning and sustaining relevance with clients. Relevance is the pertinence and importance an adviser earns in the financial life of a client. When you are the client’s first call to discuss meaningful topics affecting their financial life, you have earned relevance. The question for advisers and wealth leaders today is: How will we earn and sustain relevance with our clients in 2023?These life events in turn affect our clients’ financial lives. Reframing Newton’s Third Law for the wealth management business, for every expected and unexpected event in a clients’ livees, there is a reciprocal change in their financial lives. As a result, relevance with clients has a finite shelf life and must be continually re-earned.
The first 36 months of the 2020s have produced life-changing conditions, orders of magnitude greater than the prior decade. As advisers and their banks prepare for 2023, much focus will be appropriately placed upon changes in tax law, inflation and market outlook, and economic factors affecting wealth clients. With this as a backdrop, here are five themes for integration into your operating approach in the new year to help earn and sustain relevance with your wealth management clients:
- Refresh your client engagement approach. Conditions under which we manage our clients’ wealth are dynamic, and the market environment is likely to remain at elevated levels of volatility this year. Advisers can’t change the conditions, but we can adjust our approach to client engagement. Developing a clearly defined, thematic schedule for proactive client outreach based on topics relevant to your client base is one strategy that can have a meaningful impact. For example, in the first quarter, review the prior year, reaffirm long-term financial goals, changes in the client’s financial life and establish a relationship plan for the new year. Develop your plan for proactive outreach topics for each subsequent quarter and adjust if conditions require. With this strategy, there is ample adviser-initiated outreach, relationship awareness, and opportunities to earn and sustain relevance to each client.
- See yourself the way your clients see you. An early 2022 Financial Planning Association study identified a number of substantive gaps between the way clients perceive their planner’s (advisers) approach to serving the relationship versus the way planners (advisers) see themselves. Some of the perceptual gaps included agreement with the statements that the planner is “open to discussing what clients value most in life” (50 percent of clients agreed, while 87 percent of planners agreed), the planner “provides recommendations based on client’s personal goals, needs, priorities” (49 percent of clients agreed, 90 percent of planners agreed), and the planner “contacts clients on a regular basis to see what changes in life may affect their financial plan” (just 39 percent of clients agreed, but 85 percent of planners agreed). Perceptual gaps of this magnitude are an invitation for advisers to step into their clients’ shoes to gain a more objective perspective of the wealth management experience. Bank client engagement surveys, Net Promoter Score evaluations and individual feedback sessions can be powerful tools to learn how your clients see you and the experience you deliver.
- Master agility. Agility as a wealth adviser means observing global economic and financial events to infer their implications for each specific client, staying attuned to clients’ lives, then translating activities and events to their financial lives, and distilling this continuous flow of information to craft and deliver individualized advice. Adviser agility recognizes, as Heraclitus proclaimed, that all is flux. Normal is not a destination; it is continually being redefined. As such, the agile adviser demonstrates fluidity as conditions change to earn, re-earn, and sustain relevance with their clients.
- Distinguish your ordinary from your clients’ extraordinary. A common job hazard for wealth management professionals is falling into the “I’ve seen it all before” trap: giant liquidity events, substantive tax levies, marriage, divorce, portfolio market value drops, life and death. However, many of the “ordinary” events advisers address with their clients are truly once-in-a-lifetime events for their clients. When advisers practice emotional intelligence, they empathize with the client and recognize that while this may be the fourth estate settlement they’ve been involved with this month, the client has never been through this experience before. Empathy goes a long way in earning and sustaining relevance in your clients’ eyes.
- Re-discover your clients’ goals. Most firms have some form of client discovery–learning about the client, their future, family dynamics and planning they’ve done. The 2020s are one third of the way complete. Under “normal” circumstances, progressing through a decade brings change. Add a global pandemic, recession and uncertainty, and the level of change is exponentially greater. Client discovery should be an ongoing process. This is the year to intentionally double down and re-discover where your clients are in their lives, how things have changed, where they’re going, and how they’ll achieve success in their financial lives.
Earning and sustaining relevance with wealth management clients tomorrow is based on actions taken today. Now is the time to develop and implement your plan for how you will elevate your pertinence with your clients in 2023.
Dave Coffaro provides strategic management consultation in the wealth management arena. He currently serves as interim president and CEO of Members Trust Co. As principal of the Strategic Advisory Consulting Group, he works with financial services firms to accelerate growth and generate more favorable economics. His most recent book is Leading from Zero: Seven Essential Elements to Earning Relevance.
