Client Advisory Boards are for big firms, too


Barrett Porter of Abacus Wealth Partners recently sent me a question I thought a lot of readers might be interested in. He indicated that it was easy to see the value of a client advisory board to a small and growing practice with just a couple practitioners. He wondered, though, whether once a firm gets to over $1 billion under management and more than a dozen lead advisors a board is as effective. Barrett proposed that it may make more sense for a few senior advisers (like the partners) to have a board because they are more likely to be in a position to affect change rather than a junior advisor.

Porter raises an important issue and probably the biggest “it depends” in the whole issue of whether and how to organize a client advisory board.

In my mind, engaging in a structured conversation with your best clients on an ongoing basis is, as Barrett describes it, a “no-brainer.” What’s the downside of engaging with your top target clients?

So here is the Big If: large group practices can realize the benefits of an advisory board to the extent that the company runs as an ensemble. Many practices with multiple professionals are actually a collection of silos rather than a true enterprise. They are simply a group of practices that have pulled together to share expenses, experience camaraderie, and other benefits of working in a single place.

An ensemble, as Philip Palaveev would be quick to point out, “is a team of financial advisory professionals that relies on the team rather than an individual to service and manage client relationships.”[i] It means that each client meets multiple professionals in the firm to carry out the different aspects of the service they receive. It means that the firm provides a consistent experience to all clients rather than different clients experiencing something somewhat different depending on who they are “lead advisor” is. (Hint: if the term “my client” is acceptable within the company, you do not have an ensemble.)

If you do not have an ensemble you cannot have a client advisory board for the firm. Clients probably associate more with “their advisor” rather than with the firm. And every client probably receives a somewhat different service experience. An advisory board composed of the clients of multiple advisors would be giving you feedback on different experiences. The feedback would be confused and muddled. It would be difficult to make a lot of sense out of it. In that case, individual advisors might put together their own boards but a firmwide board would be impractical.

Assuming yours is an ensemble firm, here are a few benefits to be had by composing an advisory board of clients from across the firm.

  • It can help confirm that you deliver a consistent experience – delivering a consistent level and type of advice and service is fundamental to building a brand. Composing a board of clients across multiple advisors is one way to make sure that is what’s happening.
  • It will help distill the essence of the firm – bringing together clients who work with different advisors and asking about what is distinctive about working with the firm will help separate the elements of clients’ experience that is specific to one of your advisors and what is true of the firm generally. You can get insights into firm culture. You can tailor your procedures to make sure everyone is taught to deliver what clients value most. And you can learn the universal truths about your business that can be included in your marketing materials.
  • It can help NexGen advisors – if you can say with confidence what the experience will be like in dealing with your firm no matter who the lead advisor is and teach your younger associates how to deliver it, it can be more acceptable to assign new referrals from clients or centers of influence to those Next Gen associates. When referral sources do not believe that all clients of the firm experience the same level of service, they will typically want the people they send over to work with a practitioner “whose name is on the door.”
  • You can discover something special one of your advisors does and standardize it – because the advice is being delivered by humans even standardized processes will be delivered a little differently by different people. Sometimes those differences are significant to clients. When you discover them, you can update your procedures so that everyone does it.

Certainly the client advisory board can be a powerful source of feedback for individual practitioners and small firms. And they hold some unique opportunities for large ensemble firms as well.

Have you been thinking about starting your own client advisory board? Learn some of the secrets of making it a success with our free white paper.


[i] Palaveev, Philip, The Ensemble Practice, 2013, John Wiley & Sons, Hoboken NJ, page 5

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