Practice Lab: Retaining clients in volatile times

(February 2008) How have things been going for your business given the ongoing market volatility?

If you’re like the financial advisors we coach, then the up- and downswings have likely made your job even busier. But rest assured you can turn the turbulent situation into opportunities. Here are some great, advisor-tested ideas.

1. Hold a teleconference.

One team of financial advisors we coach organized a teleconference with their top clients and one of their money managers, who offered his analysis and outlook on the market. Clients were also encouraged to invite others to listen to the call. This was an excellent way to ensure regular communication with existing clients all at once, as well as an opportunity to open the door for referrals.

2. Touch base with prospects.

The current downturn actually marks an ideal opportunity to connect with prospects. For instance, one of our advisor clients has been touching base with his prospects throughout the market instability and, in fact, has also reconnected with a former client. During his prospect calls, he explains how his process is designed to work in good times and bad, and is very clear on his investment beliefs and philosophy. He ended up gaining back the former client and making headway with prospects. Keep in mind that you should have a solid structure in place for contacting clients on a scheduled basis, which would ensure you don’t call them only when times are turbulent.

Related Stories

To Clients: Staying invested long-term

3. Send an e-mail blast to centres of influence.

Sending an e-mail about the market situation to the “centres of influence” you work with is another approach. One advisor who did this was able to set up several luncheons with his centres of influence (in his case, accountants and lawyers), at which he discussed how he could be a resource for their clients.

4. Send an e-mail blast to business owner clients

Business owners in particular want to know what impact the market may have on them. With that in mind, one advisor who provides services to several small business owners sent an e-mail message to his clients with an interesting article about how the markets may affect their businesses and portfolios. This dramatically reduced the number of incoming calls he had to deal with.

Next: Proactive processes.

Some advisors have not been able to keep up with their prospecting efforts because their time is spent primarily “reacting” to nervous client phone calls and e-mails. Other advisors and their teams seem to be doing business as usual. Why is there such a difference?

It all comes back to being proactive instead of reactive. Proactive advisors share a number of common characteristics. First, they have a defined investment or financial planning process — and most of their clients have been through that process. As part of this process, clients completed a risk profile, and that formed the basis of their portfolio. The portfolio would have included investment choices that address market instability.

Proactive advisors have also completed a retirement projection and estate planning, and have looked after insurance needs for baby boomer clients. This planning enables the advisor to show clients they are still on track to reach their goals or offers them the chance to make adjustments if they are not on track.

Another thing that’s paramount to these advisors is a clear investment philosophy that has been consistently communicated to clients.

Clients can make clear investment decisions because these advisors have a written list of investment tenets or beliefs. Some have gone further and developed an investment policy statement — especially helpful in client discussions about why a client portfolio was set up the way it was.

Finally, productive advisors have a system for regular communication with clients. For example, one team who makes quarterly update calls to their top clients has had very little interruption from incoming calls. The mantra is “We call them all the time, so they don’t have to call us in times like these.”

Ask yourself how you are managing the volatility. Does your client process give clients the peace of mind to have a long-term point of view? Have you consistently communicated your investment philosophy to clients? Do you have a proactive communication plan for volatile market conditions? What opportunities could you capitalize on if you had the time?

April-Lynn Levitt is a Calgary-based coach, and Kim Poulin is a Montreal-based coach. They provide one-on-one customized coaching to financial advisors, helping them to achieve greater confidence, focus and freedom. They can be reached at april@thepersonalcoach.ca or kim@thepersonalcoach.ca.

(02/19/08)