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Doug isn’t the only independent FA whose words are worth a listen.
Others who chose business ownership with Wachovia Securities also want
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FEATURE STORY
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Affluent Client Advisory
Boards
By Matt Oechsli
Orange County: "What's your opinion on client advisory
boards?" asked an advisor during the Q & A session following my speech,
quickly qualifying his question before I could respond with, "I've been
hearing client advisory boards being recommended a lot."
This wasn't the first time I've been asked this question and
undoubtedly it will not be the last. It appears that this is one of
those activities that, at first glance, appears to have some cachet and
is receiving a lot of chatter in the industry. Unfortunately, it flies
in the face with what our research tells us about the affluent and
Rainmakers.
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As has become my nature with this line of questioning, I inquired to
uncover the real motivation behind the interest in creating such an
advisory board. Without fail, after a bit of prodding, this advisor
admitted that getting more referrals was his goal. As usual, he followed
this with the standard refrain about getting suggestions to improve his
practice.
Allow me to paraphrase my response. First of all, you NEVER want to
be disingenuous with anyone, much less your affluent clients. If you
would like to be able to better penetrate their centers-of-influence you
need work on your affluent sales skills. This means you need to master
the high-impact marketing activities of Rainmakers. The affluent are
savvy and can smell ulterior motives a mile away. Also, it's important
to understand how the affluent feel when asked for a referral (83% are
uncomfortable). Rainmakers source names linked to their affluent
client's COIs and then ask for personal introductions (8 out of 10 good
affluent clients are comfortable introducing).
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Secondly, in order to improve your service model you will need to share
every aspect of your business (warts and all) with your affluent client
advisory board. Are you prepared to do that? Whether you have too many
clients, no consistent service model, not enough support, or poorly
designed roles, etc., Whatever your circumstances, you had better be
prepared to act on their recommendations. Regardless of how you position
the advisory board concept to this esteemed group, in their minds, first
and foremost, they are your clients.
Although I was responding to this one advisor, I was really
communicating with the 150 or so other advisors in the audience. Which
is why I proceeded to support my reasoning with a additional bits of
research regarding the affluent...
- Most work 50-60 plus hours a week - time is one of their precious
commodities, so you never want to waste it.
- Only 50% trust a financial advisor for providing unbiased advice
regarding their family's finances - they hate feeling manipulated, so
you don't want to be disingenuous and you need to work hard to improve
your "trust factor."
- They want full disclosure regarding all fees and commissions - they
hate hidden fees, so you always want to be open and honest about
everything.
- They expect personalized service - they want you to care about them
beyond their investments, so make certain you're spending personal time
serving them.
- They want you to bring in outside experts when necessary - their
time is at a premium and they want you to vet these experts, so they
want you to make things more convenient, and you find yourself back to
the issue of being careful with their time.
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Does this mean that no client advisory board has every worked? Of
course not; there are always exceptions, but these have been carefully
attended to with purity of intentions. My point is that with the time
and energy required to create an exception (a successful affluent client
advisory board), a Rainmaker would have penetrated each of these
affluent client's centers-of-influence, orchestrated multiple personal
introductions, and have developed a robust affluent pipeline that is
already bearing fruit.
Our research on financial advisors continues to tell us that they are
extremely susceptible to that black-hole of avoidance patterns. They
engage in activities that keep them busy, provide an illusion of
productivity, but keep them from consistently romancing affluent
prospects into their pipeline.
With only 3.9% of advisors who are marketing their services to the
affluent annually bringing in 10 or more new affluent relationships,
something is wrong. From my vantage point, too many advisors are going
down the wrong path. We know what the affluent like and dislike and we
know what Rainmakers do on a daily basis. Because of this we are very
strict in how we coach. One of our biggest challenges is keeping
advisors from wandering down that avoidance path, wasting two precious
commodities; time and money.
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This is why we insist on helping advisors develop a critical path
linked directly to attracting, servicing, and developing loyal affluent
clients -- it provides the context from the coaching. The formula is
simple; every fixed daily activity, every project, every dollar spent
must be within this critical path. Period!
Simple but not easy as affluent client acquisition requires advisors
to venture far outside their comfort zones. There is a lot of white
noise in the air concerning marketing to the affluent, so be careful.
There is no one way to become a masterful player on the affluent playing
field, but being disingenuous and gimmicky are not part of today's play
book.
For a copy of our 15 Benefits You
Bring to Clients document, visit our free download center.
Once again, we want to thank all of you who have emailed comments and
questions to us. We will continue to do our best to answer each one. If
you have any topic suggestions or special requests, please contact Rich
Santos, publisher of Registered Rep. and Trust & Estates
magazines, at rich.santos@penton.com.
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