Knowing what your clients want

Knowing what clients want is the key to unlocking more successful relationships and building a stronger financial planning practice. The trouble is, chasing client desires through different market environments can make the most seasoned advisor’s head spin.

After all, in the middle of a bull market, how many of your clients are looking for security? And when the bear roars, how many are screaming for aggressive growth portfolios? Client expectations related to service may change or be amplified based on where we are in the economic cycle.

But as your clients seem to lurch from unbridled optimism to the depths of despair, keep in mind many advisors think client needs stay the same more than they change. Identifying common themes that are stable through bulls and bears can help you develop strategies to meet and exceed your clients’ expectations in every market.

Clients want knowledgeable, proactive advice

At minimum, clients expect their advisors to be knowledgeable and experienced, and to know their businesses well, says Cynthia Kett, a CFP at Stewart & Kett Financial Advisors Inc. in Toronto.

“The easiest way to demonstrate knowledge,” she says, “is to have credentials that are relevant to whichever part of the finance field you’re in.”

As for experience, she says years in the business count, but so does an ability to describe anecdotally how you’ve helped clients in similar situations.

“They’re going to get some comfort from the fact that you’ve seen this before, you know what to do about this situation, and you’ve worked with other clients and helped them,” she explains. “Also, if you can find clients to act as references for you or who can provide testimonials, that’s certainly helpful.”

As Kett suggests, it’s not enough to be knowledgeable in an ivory tower sense. Clients want you to apply your knowledge to their circumstances. Specifically, Kett says, clients want their advisors to stay on top of developments in the financial world and contact them without being prompted when there’s a change in the economic environment or tax legislation that may affect them.

“They want to believe that we are constantly monitoring all the things that are going on that might have an impact on their personal finances and, when there’s something that would be relevant to them or important to them, that we will contact them,” she says.

Eva Froese, an investment and retirement planner at RBC Wealth Management in Calgary, agrees this approach to delivering advice is essential. “Clients want someone who is proactive and anticipates their needs, as opposed to someone who is reactive,” she emphasizes.

Clients want to participate

“Levels of participation have dramatically changed,” observes Frank Wiginton, a CFP with TriDelta Financial in Toronto. Influenced by market volatility, he says clients want to re-engage with their plans.

During the strong markets that preceded 2008’s meltdown, he suggests, investors became more passive. They took a look at healthy returns of 10% or 15% and felt confident they would reach their goals without doing much else. Then the market experienced dramatic declines.

“People are saying, ‘I can’t afford to be losing 30%, 40%, 50%, 60% on my portfolios anymore. Is there something else? Is there a better way? What else should I be doing?” Wiginton says. “What we’re seeing is more and more people wanting to participate at a much greater level, wanting to be much more involved in what’s happening – and they’re looking for things other than straight investment returns.”

He says his clients are increasingly interested in improving returns through tax reduction and more efficiently structured portfolios, as well as capital appreciation. He sees this as a tremendous opportunity for advisors who offer comprehensive financial planning services.

“I believe what clients want is a better quality of life through greater knowledge and understanding of what their overall situation is – not just an investment product,” Wiginton emphasizes. “I believe what clients want is greater planning.”

Bernie Geiss, a CFP at Cove Financial Planning Ltd. in North Vancouver, says planning is top of mind for his clients too. Planning excites clients, he suggests, because it provides them with the ability to improve their situations. It can also calm them down, make them comfortable with where they are, and prevent them from making unnecessary drastic changes.

“It’s from that point they can make informed decisions about what they need to do to achieve the objectives that they articulate,” Geiss says.

Clients want empathy

In addition to bringing them into the action, clients want their advisors to demonstrate empathy, says Kett. That means celebrating their achievements with them, as well as being there for them when they experience a loss. Over the past year, Kett’s practice has seen a number of deaths among clients and their families.

“When there is a death in the family, I will meet with them on a complimentary basis, just to talk to them and hear some of their concerns about what this event means for them both emotionally and financially,” she says.

She confirms they’re going to be OK financially and stresses they shouldn’t make immediate decisions about inheritances. But the most important message she gives them is that they have her help and support.

Kett adds being empathetic means forgetting self-consciousness and the mental clutter of your to-do list, and giving all your attention to your client. It also involves “being receptive to all the non-verbal cues if you happen to be meeting in person, or the vocal cues if you’re speaking on the phone,” she says. “Really, it is just setting aside all the other thoughts and things you’re doing to focus on your client for that period of time.”

Geiss agrees clients want to know you care about them and are engaged in a meaningful relationship. His in-depth process for bringing new clients on board asks open-ended questions that demonstrate his genuine interest in them as people – such as, “If you and I were sitting here three years from today, what had to have happened in your life to make you feel successful and happy . . . both professionally and personally?” and “Tell me three things about your husband or partner that you’re really proud of.”

He explains, “It’s a way I can get to know them to figure out what are the best recommendations I can make for these people that support them in their goals and that are meaningful to them.”

Clients want a two-way relationship

Geiss’s wide-ranging philosophical questions help him establish strong client relationships more quickly. In fact, in his introductory meeting with them, he tells them his goal is to condense the process of getting to know them from 10 years down to two hours.

But building a solid long-term relationship isn’t a one-way street. He knows he has to open up to clients just as much as they open up to him. So, every quarter, he sends a letter to his clients that keeps them abreast of everything that’s happening in his life.

“I tell them what my kids are up to. I tell them what my wife is doing. I tell them about the fun things we’ve done. I tell them about some of the difficulties we’ve had . . . and I speak to them as if I’m speaking to a friend,” he says. “I can’t sit on the phone and call everybody [but] my attitude has been that as long as my clients know what I am up to, and what I’m about personally, if I can create a personal relationship with them through communicating with them, they’ll not miss me as much.”

As a result, he says, clients who haven’t seen him personally in two years but who have read his quarterly letter still feel engaged as if no time has passed.

Another part of a productive two-way relationship is being prepared to say something when a client’s wants run against their best interests. Kett, who is proud of the deep relationships she cultivates, says she sometimes has to steer natural risk-takers like entrepreneurs away from the aggressive investments they’re drawn to, and coax natural risk-avoiders like retirees away from a portfolio exclusively comprised of Canada Savings Bonds.

“When you meet clients and you listen to them and you hear what they say and they explain their lifestyles and what kinds of things worry them, then you can say, ‘Okay, I have a pretty good understanding of the type of person or type of family this is and, based on that, this is what I would suggest,’ ” she says.

Clients want reassurance, clarity and context

Boyd Anderson, a CFP at Anderson Financial Services in Moncton, sums up what clients want in one word: reassurance. There are a number of dimensions to that reassurance, he suggests, including reassurance they’re not going to run out of money, reassurance they’re protected by sufficient insurance, reassurance down markets will recover and reassurance the investment recommendations you gave them are still appropriate.

In a world where the exploits of the likes of Bernie Madoff and Earl Jones have been splashed across the front pages, they also want reassurance you’re not a fraudster, Anderson adds. He’s addressed this one head-on by including a note with a recent set of quarterly statements that began: “Several clients have asked me how the Bernie Madoffs and Earl Joneses of the world got away with their ‘Ponzi schemes’ for so long. The customer would receive a statement, probably similar to my Excel statement, probably on very nice letterhead with multiple pages saying nothing. The bottom line is that the statement was a phony and not backed up by any third-party statements. It amazes me how people could not have suspected that things were wrong. Making 10% to 12% is great, but not when everyone else was losing money.”

The note served two purposes: it provided reassurance that Anderson was operating a legitimate practice, with third-party statements backing up his claims. It also helped to make sure his clients maintained realistic performance expectations. After all, Anderson emphasizes his goal is always to under-promise and over-deliver.

Another way to reassure clients is to provide a crystal clear snapshot of their current situations, suggests Geiss.

“People who are confused about their situations are anxious,” he says. “They want to know where they are today in terms of their current assets and liabilities . . . As soon as you tell them how everything works, where everything is, how everything is set up, there’s a sigh of relief.”

Froese agrees clients need to know where they stand. They also need context.

“In the current environment, clients are coming to me for clarification,” she says. “There’s so much information that’s been coming at them through the news and media. Clients are wanting me to act as a filter and help them decipher what information is accurate and what’s relevant.”

She says the question that often comes to the surface is around how market volatility has affected their progress towards their goals, and what can be done to ensure they still reach those goals. But that question isn’t isolated to bear markets, she argues, and financial advisors have a responsibility to answer it in every environment.

“My job has always been to educate our clients,” she says. “I haven’t really noticed a huge change in my clients’ expectations.”

Clients want attention

One of the mantras in the field of financial services is “communicate frequently” – but not all clients want to hear from you every month, or every week.

“Every client is different,” says Wiginton. “I’ve got a client that I speak with every couple of weeks just because he’s very much involved [and] then I’ve got a client who says call me pretty much only when there’s a problem or when there’s something you believe needs to change. It comes down to trust and how long they’ve worked with us.”

So, rather than frequent communication, it may be more accurate to say clients want you to be responsive and to pay attention.

“If they experience a change in their personal circumstances like a life event – marriage, birth of children, divorce, death, loss of a job – if they call us, they want us to respond as soon as possible. They want to feel that if they are coming to us with a problem, that we’re going to help them deal with it,” says Kett.

Sometimes, to deliver responsive attention, advisors have to make themselves available outside their offices and outside business hours.

“I work 24/7,” Froese says. “I can meet clients whenever, wherever. It’s about being convenient for our clients.”

Wiginton tells his clients to get in touch with him anytime they need him, and he includes his cell phone number on his business card. He recalls one 15-minute call he took from a client on a Saturday afternoon. The client was at a car dealership and had been offered an attractive deal on a lease – but called Wiginton because he had advised against a lease based on the tax structure of the plan they’d developed together. The call was to seek Wiginton’s opinion, and he was happy to take it.

“It didn’t really interrupt my life, and he was very appreciative,” Wiginton says. “Rather than him getting sold a product that may not be appropriate for him, he gave me a call and I can give him a better quality of life . . . and help him reduce his overall stress and anxiety levels knowing that I’m just a phone call away.”

Clients want to sleep at night

When it comes right down to it, Geiss says what clients really want is a good night’s sleep.

“People are more concerned about holding onto what they have and what they’ve earned than risking it to make exceptional gains,” he says. “And that actually hasn’t changed. It seems like the more money people have, the more they’re afraid of losing it. It’s the people who don’t have a lot of money that typically want to risk it all.”

And when clients wake up from that good night’s sleep? Geiss says clients want the confidence they’ll be able to do what they plan to do, and the planning to turn their dreams into reality.

“Overall, I really think clients are looking for someone who’s competent, someone who’s knowledgeable, but more importantly someone who understands their goals and their values and their dreams,” says Froese. “I have one of the best jobs in the world. Clients share their dreams, they share their goals with me, and it’s very exciting.”

How to find out what your clients want

Advisors use various strategies to uncover clients’ deepest desires – from informal questions in a meeting setting to formal, written client surveys.

“I’ve never conducted a survey, but I do ask [clients] after our meetings, are you happy with our relationship, was this meeting worthwhile, and did you learn something new,” says Eva Froese.

Frank Wiginton is a believer in surveys, and says it’s best to keep them short to get a better response rate. His last survey, conducted in 2007, identified one client who said he was happy with the financial planning he was receiving but was disappointed that his investment returns weren’t keeping pace with the wider market’s dramatic gains. Wiginton checked and found the client was earning around 12.5% on a portfolio that was aiming for 7%.

“That was an alarm bell that helped us realize we need to be constantly communicating with all clients about maintaining perspective,” he says. Now, he says, “Every conversation is about reiterating what we’re trying to do and reminding them what their goals are within their overall plans.”

Bernie Geiss is about to send out his first large-scale client survey, asking a range of questions related to service, including whether clients feel respected when they call his office, are greeted in an appropriate manner and receive responses to their queries in a timely fashion.

“I’m hoping for glowing responses!” he says.

“We don’t do [surveys] regularly,” acknowledges Kett. “We probably should. But a lot of our clients we’ve had for many, many years; we know them quite well and generally we talk to them instead of doing surveys.”

Still, she says, surveys have served as a useful barometer of how well her practice delivers what clients want.

“We were sometimes surprised at how much they valued our services,” she says. “You always strive to do a good job and you always try to address their needs and serve them well. But it sometimes is quite overwhelming just how much they rely on your advice and how much they appreciate it.”