As clients’ hiring decisions are increasingly determined by price and information — both factors that are increasingly commoditized in the investing industry — advisors will have to differentiate themselves based on service. Despite this obvious conclusion, many advisors are still taking five areas of client-centered service for granted.
In a blog post published by the CFA Institute, author and researcher Barbara Stewart noted that many of the investment professionals she knows make their calls and send their email on Friday afternoons. However, many of her clients leave for their cottages on Friday mornings and remain disconnected until Monday or Tuesday. Some of her clients only want phone calls; one person doesn’t own a computer.
“Ask each and every client about their preferred method of communication. Then communicate in precisely that way,” she stressed.
The next step is to be willing to visit for quarterly in-person conversations. While long-distance channels are ubiquitous, she stressed that in-person meetings are still the most powerful approach to communication. “Customers will choose you if you show up a lot and your competitor doesn’t,” Stewart said. “Robots can’t even show up.”
Networking is another often-overlooked differentiator. Stewart cited Krisi Larkiala, a board member of Grannenfelt Finance in Helsinki, Finland, who said that each customer has a different role in society, and advisors should consider how they can make a difference in their life. “Use any mode of communication [you can] to connect customers with the contacts they need,” Stewart said.
Fourth, Stewart said, is to resist the urge to serve large account-holders at the expense of smaller ones. Small clients might not stay that way, and they talk to larger ones. Whether it’s due to people’s upward asset mobility or word-of-mouth, offering consistent service across all clients will pay off down the line.
Finally, she noted, advisors should help people learn about the investing issues that they often can’t educate themselves about. Offering customized education — about the history of stock markets, how bonds work, how to trade online, or whatever topic they want to learn about — goes a long way toward trust, and it doesn’t necessarily take much time.
“In my experience, only 5%–10% take up the offer. And those that do tend to take only one or two lessons,” Stewart said. “I think the human touch in this kind of education will beat the robot every time.”
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