Rediscovering Your Clients

Advisors may find a gap between what they think clients want and what the clients really want. The solution is getting to know the clients all over again.

By John Bowen, founder and CEO of CEG Worldwide

Think you know your clients inside and out? Chances are, you don’t, and the gap between what you think your clients care about and what is actually on their minds could be costing you plenty in lost opportunities to retain key clients and tap additional sources of revenue.

That’s why it’s time to reacquaint yourself with your clients. In our coaching program, I’ve been encouraging advisors for some time now to conduct what I call rediscovery meetings with their existing clients-including those they’ve been working with for years or even decades. In these meetings, advisors sit down with clients and ask questions that allow them to understand their clients’ unique situations on a deeper level.

The Right Time

The reason to have rediscovery meetings with existing clients now should be obvious. So much has happened in the financial markets and the overall economy in recent years. In the wake of all the turmoil and uncertainty, your clients’ situations, concerns and big-picture viewpoints on a whole range of financial issues may have changed-perhaps a little, perhaps a lot.

The aim of the rediscovery meeting is to reconnect with clients by showing your concern for their well-being and reassuring them that you want to understand their situation on a comprehensive level so that you can help them as best as possible. This connection is a key part of building rock-solid, long-term loyalty among your client base.

You can accomplish this by asking them about issues that you might ask new prospects during an initial discovery meeting-for example, their key goals and values, their interests and most important relationships, their assets and how they prefer to work with their financial advisors. You might have asked them about these issues years ago, but it’s time to know if any of them have changed. Having up-to-date information in these areas will enable you to create an accurate, current and comprehensive profile of your clients that you can use to solve the big financial challenges they face today.

Client Disconnect

Unfortunately some advisors don’t see the need to rediscover their existing clients. They think they know their clients extremely well. While that is certainly true in some cases, industry research tells us that advisors have a history of being significantly disconnected from their clients’ actual needs, wants, goals and concerns.

For example, the top concern among middle-class millionaires is losing their wealth, according to research by Russ Alan Prince and David Geracioti. An overwhelming majority of affluent investors surveyed from this group-88.6%-share this fear.

And yet, the perceptions of advisors who serve these millionaires are far different. Only 15.4% of these advisors think that 20% or more of their affluent clients are very concerned about losing their wealth. The rest of the advisors-nearly 85%-are unaware of one of their clients’ biggest financial fears.

These results tell us that many advisors are missing a huge opportunity to serve their clients well. Because they don’t understand this essential challenge, advisors are not in a position to begin to solve it. In addition, they’re losing out on opportunities to generate additional income-for example, by providing wealth protection products and services.

This advisor-client knowledge gap extends to investment management too. While only 11.9% of surveyed clients overall were concerned about diversifying their portfolios, one-third of advisors (33.4%) believe that their clients have this concern. Whether these clients should be concerned about diversifying their portfolios is a separate issue, of course. The point here is that so many advisors simply do not know their clients’ views on this critical part of investment management.

And then there are the non-investment gaps. These days, affluent investors increasingly want you to "get them," to understand them beyond the investment level. But a look at affluent clients’ personal interests and responsibilities reveals more gaps between clients and their advisors.

For example, ensuring that heirs are taken care of is a top concern for 79.2% of all affluent clients surveyed. However, just 40.8% of advisors believe this is a concern for their clients. Once again, they are passing up significant opportunities to help their clients solve important financial challenges.

There are additional gaps in key areas, including education planning, asset and personal protection, long-term-care planning and charitable gifting. One example: the fear of being sued. It’s a concern of nearly half of affluent investors. And yet, less than 10% of financial advisors recognized that this was a major issue on their clients’ minds.

These are all areas where you can add substantial value to your clients’ lives and, in many cases, generate additional revenue for your business. But this can happen only if you take the time necessary to rediscover your clients and actually understand what’s on their minds.

Closing The Gap

The specific gaps you might face will depend on your client base and how well you’ve worked to profile your clients in the past. But our experience with advisors in our coaching program suggests that many of the gaps mentioned above continue to exist in today’s environment.

Consider the experience of Scott Hohman of Strategic Investment Advisers, who has conducted 25 rediscovery interviews with clients since last June and has netted some key insights as a result. "The meetings have revealed to me that my clients care a lot more about ensuring the financial well-being of their families than I realized before," he says. "In the past, we’ve talked mainly about investing and the money side of things, but now I am hearing clients tell me more about their goals for their children or their favorite causes, and how they want their money to serve important purposes and values."

It’s this new focus on values and intent that Hohman says is most powerful. "Asking them about their values and goals, which is part of the questions that I use in my rediscovery meetings to develop a complete client profile, gets them talking about these issues that I’ve never focused on before. When we dig deep into their values, we find out why they are accumulating wealth and working so hard for their money." Hohman’s firm has offices in Sylvania and Findlay, Ohio.

In addition, Hohman says that he is hearing more about the key concern of health in retirement and its potential impact on clients’ wealth. "Rediscovery meetings are helping me realize how concerned clients are today with protecting their wealth over time. For example, one big topic that I’ve learned is on my clients’ minds is long-term-care insurance. They don’t want to see their hard-earned assets depleted from a lack of adequate healthcare."

The result: Strategic Investment Advisers has begun identifying new ways to serve its clients better and bring in additional revenue to the firm. "We are now referring clients to an insurance agent who can help them develop a long-term-care strategy, and we are looking for ways to provide clients with more estate planning services," Hohman says. "Clients with whom we do rediscovery meetings are also transferring more of their assets to us. Our recurring revenue is up 20% year-over-year."

Hohman’s experience shows that it pays to circle back with clients and make sure there are no gaps between what they want and what you assume they want. Chances are, you’ll learn at least one thing that is new and surprising-and potentially profitable. You can never have too much information about the people you serve-and that goes double in today’s market.

Source: CEG Worldwide.

Reprinted from: Financial Planning

About the Author

CEG Worldwide’s founder and CEO, John Bowen has long been known as a leader in the area of adding value to financial services firms. Bowen started his career as an independent broker-dealer representative and then became a fee-based financial advisor. He was ultimately named the CEO of Reinhardt Werba Bowen (RWB), a money management firm that helped other financial advisors raise billions of dollars in assets. In 1998, Bowen became CEO of Assante Capital Management upon the acquisition of RWB by Assante. He left Assante to start CEG Worldwide in 2001, in order to help advisors realize substantial success through the use of CEG Worldwide’s business development systems.

He is the author of many books, including Breaking Through: Building a World-Class Wealth Management Business and The Prudent Investor’s Guide to Beating the Market.