Following up

(Februaru 2006) In recent months, we’ve looked at how to implement a consultative wealth management process, using a series of five client meetings. Each of these — a discovery meeting, a wealth management plan meeting, a mutual commitment meeting, a 45-day follow-up meeting, and then regular progress meetings — is designed to build a lasting advisor-client relationship. This in turn enables you to create optimal solutions for achieving each client’s most important goals.

We look now at the 45-day followup meeting, which should take place six weeks after the prospect becomes a client during the mutual commitment meeting. The following four steps will make this meeting a success:

1. Help the client get organized — and win high marks for service—by providing a tabbed binder or notebook in which to file all the paperwork. It’s not uncommon for clients to be a bit overwhelmed with the amount of paperwork they receive from an advisor, particularly if they have multiple accounts and a lot of money has been transferred.

The notebook should have individual sections for brokerage statements, your regular progress reports, your newsletter (assuming you produce one), and for all other communications with the client. Emphasize the long-term nature of the relationship by designing the notebook to accommodate a minimum of five years’ worth ofpaperwork.

During the meeting, point out the different tabbed sections in the notebook and explain briefly what each is for. Place all of the documents in the appropriate sections, showing how to read each of them as you do so.

2. Place short-term progress into a long-term perspective. Many portfolio management software programs annualize returns, even for short periods, and your client will no doubt notice those returns as you’re helping him or her to organize the paperwork. If the market did well during the 45 days since the client began working with you, the annualization of the returns will make you look like a genius. But, if it’s down, the negative returns will make the client wonder why he or she is paying you.

Turn this into a learning opportunity by using it as a real-world illustration of the irrelevancy of shortterm returns. Explain that what’s really important is not investment performance over an isolated period, like the last 45 days, but rather achieving goals over a lifetime. Remind the client no one can predict with any accuracy which way the market will swing in the short term, but that by making prudent decisions today, you can maximize the probability of success over the long haul.

3. Request referrals. As you did during the mutual commitment meeting, ask the client for referrals. Simply describe the type of person who would most benefit from your services, and ask whether he or she knows anyone who fits the profile.

4. Set up the next meeting. Finally, explain the next meeting will be your first regular progress meeting. Describe the purpose of these meetings, which is to continually review the client’s progress toward meeting his or her goals. Since it’s important to customize your communications to every extent possible, let the client choose the time interval for the regular progress meetings, be it monthly, quarterly, semiannually, or annually. If the client seems unsure, I recommend you start off by meeting quarterly because I believe it’s the ideal interval for keeping in consistent touch with clients. I’ll discuss exactly how to conduct those regular progress meetings in my next column.

Copyright 2006, CEG Worldwide, LLC. All rights reserved. John Bowen is founder and CEO of CEG Worldwide, a U.S.-based global training, research and consulting firm. “The Bowen Report” appears monthly in Advisor’s Edge.

(02/24/06)