This article first appeared on Nasdaq.
I wonder how many advisors ask their clients some version of, Would you recommend me to your friends?
The advisor-client relationship is a personal one. After all, talking about your money is about as personal as you can get. Why then are advisor organizations still using various forms of gifting to attract more clients, rather than fostering highly engaged clients? (Which I would posit is the best way to attract additional business – by advisors having tailored, meaningful conversations with existing clients.)
Advisor style, client style
To really appreciate the role advisors have in asking the question – would you recommend us to a friend? – it’s important to know the style of each advisor and their client to understand the different behaviors of each at a deeper level. If advisors do not have any understanding of behavioral differences, they will not be able to connect with clients sufficiently (deeply) enough to be able to broach this question.
Every time an advisor meets with their client, the conversations they have, the advice given and the stories they exchange should all lead to the final exchange – would you recommend me/us to a friend? Whether they actually make a referral is only part of the equation; one thing you are really asking is, Are they happy, well-served and do any adjustments need to be made to your relationship?
The outgoing, engaging, conversationalist client will more likely recommend, without being asked, if the service is good and if the exchange was both helpful and fun. They also will be the first to say negative things when the service is not right.
The more reserved, quiet client who is contented with the service they are receiving may well recommend you to close friends without being prompted to do so. And they likely would not actively share negative experiences they have had with their advisor with others unless prompted to do so.
People are different. Each has their own unique personality. Trying to attract new business with a one-size-fits-all approach will never work. Again, the key is to invest in understanding individual behaviors at a deeper level, then using this insight to bridge the gap to manage the differences. Also, technology solutions can be deployed to help manage the customization of the different behavioral experiences required.
So, what’s getting in the way of this approach? Clearly much depends on the individual behaviors of both the advisors and the clients.
The next generation of investors will have little or no experience of face-to-face connection. They will rely on technology to do business. To receive the customized and compliant service they want from a provider will be determined not just through the outcomes of successful advice, but even more importantly, through understanding the behaviors of their advisors and how closely the different personality styles align.
Next-gen clients will:
- Expect you to get to know them;
- Want you to understand their life goals;
- Demand that advice lines up with the grand plans they have for their future; and
- Expect or even require you to advise and counsel them on how to take appropriate steps to achieve their goals.
(Hint: Get ahead of the game by meeting these needs now, and not waiting for the next generation to tell you what they want.)
Balance traditional and tech
For many, the personal touch will always best the remote tech solution. But it is not for everyone all the time through the client life cycle. Getting the balance right by understanding behavioral differences and managing them is where relationship success sits. Yes, the introduction of technology can be seen as a negative disrupter, but it isn’t.
Building a strong connection with clients based on understanding their behavior will reveal those who explicitly want a face-to-face interaction, and those who prefer a digital solution (at least to some degree). Knowing how to manage these differences and different expectations is where meaningful conversations can be developed.
Once a relationship is built, connection can be maintained via any media. Reliance on technology to stay connected with family and friends and keep each other up to date with happenings is now the norm. Why wouldn’t the advisor-client relationship more heavily invest in the use of technology, as it also enables scaling customized experiences for each client?
Interestingly many observers of the financial services industry cite technology as the “rogue,” yet if a personal relationship is what is required, where better to forge these relationships than through the smarter use of technology?
Grow and win
When advisors invest in knowing how to deal with different behavioral styles, the first question after the initial face-to-face client meeting with a client should not be – would you recommend us? – but, Would it be good to stay in touch more regularly online?
Consider leveraging digital technology solutions while making sure that offline communication with clients is not ruled out completely. Not all advisors or clients will be comfortable with this. But if you have no understanding of behavioral styles, you will never know who to target with this 2020 approach to delivering financial advice, which can build deep relationships to grow the business.
So, if you want to build business through clients referring you, first build a behaviourally smart financial planning process, and then add on or adapt tech solutions to enable a customized behavioral experience for every client. Of course, through greater behavioral understanding you will know the more outgoing clients in your portfolio who will be comfortable to step out in the world to recommend you.
It just may be that technology will also provide a way for more of the naturally reserved clients to make referrals as well. Forget investing in “nice to haves” and “consumables” – products – to attract new clients and build referrals. Start investing in understanding human behavior and how it can be practically applied – for your benefit and for the benefit of your clients. A win-win.
It’s in this atmosphere of genuine connectivity that an advisor’s services can grow, both in depth and reach.