How clients forget your value proposition


When your clients refer  you to someone, what do they say? Ideally they would mention some aspects of what makes you different or at least describe the aspect of your advice that had the most significant effect on their lives. What I hear more often, though, is clients referring to the customer service (which is good but generic) or how well the advisor manages their portfolio. If you suspect your clients talk like this when they give you a referral even though you have done lots of planning for them, you are likely getting fewer phone calls than you could.

It is client advisory board season again and I am struck by something I see more frequently than I would suspect. We gather an advisor’s top clients and ask them what they value most. When we ask the advisor, the answer is planning. When we asked the clients, the answers often relate to service or portfolio management. There is another exercise where we ask clients to list and prioritize the elements of the relationship as components of the overall value. Once again, if planning comes up it is often low on the list.

From a referral perspective, that’s a big problem. If your client talks about your service or investment management, it will be hard for a prospect to distinguish you from other advisors.

We need to make sure we are regularly engaging in planning so the transformative effects stay top of mind. That way, when your client refers you that’s what they will talk about.

How does this happen? I have a theory.

Once the initial financial plan is completed, planning activities occupy less and less time during client meetings. Some planning issues may get addressed periodically but it stops being the focus of client meetings. More and more of the meetings are dedicated to the portfolio. That’s where there is always something changing, always something new. So, inadvertently, the advisor makes the relationship more about the portfolio than about the planning advice.

Over time, the client forgets how significant the planning was. They still love the advisor but what is current to them are the most recent discussions about the portfolio or the markets. So, when they have an opportunity to make a referral, that’s what they talk about.

Here are a few tips to make sure that the planning stays present with them and gets included in the referral discussion:

  • Don’t do portfolio reviews, do strategy updates. Make client reviews about planning issues rather than investments. Take the emphasis off the portfolio. It’s just a means to an end.
  • Have a schedule of planning issues you address on a rotating schedule with clients.
  • Relate investment outcomes to the status of their plan. If the markets have been strong and the return exceeds the projected return, talk about how that affects the plan. Maybe they can reduce their stock exposure for a time or adjust the timing of a goal.
  • When you talk with clients about making introductions or referrals, discuss the planning you have done with them rather than the investment management or even the customer service (they will remember the customer service on their own anyway). Rather than asking for an introduction to someone “so they can enjoy the same level of service we have been providing you,” suggest an introduction so they can “realize some of the benefits of the strategy we put together for you to get you to retirement that much faster” or “organized things so that you saved all that money on taxes.”
  • Limit how much of your review meetings are dedicated to discussing the portfolio and its performance. One of the most succinct things I heard at an advisory board was during a discussion of the amount of time during client reviews that was dedicated to the portfolio and market updates. The way the client put it was spend less time on the portfolio and more discussing my issues.

One of the reasons you are not getting more referrals may be that your clients are spending too much time talking about investments and not enough talking about the transformational effects of the planning you did for them. The good news is you can fix that. Keep planning (and its benefits) present with your client and they will include it more consistently in the conversation when they make a referral.

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