The foundation of the client driven practiceTM is feedback and guidance from your target clients. One of the primary ways we obtain that is through the creation of a client advisory board. A lot has been written about client advisory boards and their value to a financial advisors practice. There is one area where I disagree strongly with most other consultants: the importance of bringing in an independent professional facilitator.
I won’t spend much time discussing the benefits of hiring a professional to perform a service or expertise is required – you all know clients can pick mutual funds, and you also know the reasons why they still need to hire you for those kinds of decisions.
Apart from the expertise issue, there are a number of ways the facilitator contributes to the dynamic of the advisory board just by being a person from outside your practice. Here are some of the ways the group process is enhanced:
- Understand how to frame discussion questions to stimulate the best participation. There are many ways to ask a question, and the outcomes can be radically different. For example: “What do you think of our financial plans?” As opposed to: “What part of our financial plans you find most useful? What part of our financial plans caused you change something?” Or, “Which of our services do you find most valuable?” As opposed to: “We want to focus on the services most valuable to you. Can you describe an experience you had with us that caused you to change the way you feel about money?” Framing the discussion the right way can produce much more extensive and richer information.
- Create a dynamic that is impossible if you chair your own meeting – An independent facilitator can get away with asking some questions the advisor cannot. Consider the question “What do you think would be the best way of delivering a service like that?” From a facilitator, this is gathering information. From the advisor, feels to many clients like a sales pitch.
- Serve as a sounding board or target for criticism clients would not be comfortable saying directly to you. Criticism and expressions of concern uncover the value in the process. But, people don’t want to criticize you, especially when you’re buying them a nice dinner. A facilitator can introduce a topic and open discussion about services and get to “I really don’t like…” Jackpot. We have uncovered an issue that will positively change the client experience. Once the client sees you involved in the conversation, and sees you are willing to discuss things that may concern them, they know they have permission to bring up any other issues they may wish you would fix. It requires that you be sitting at the table and the clients see you as part of the group. And it requires that someone different be standing at the front of the room facilitating.
- Avoiding responses that shut down conversations. There is a natural human response to defend against criticism, however minor. But the right response is worth several times your investment in hosting the advisory board. For example, if a client says “this other advisor provides these services way better than you.” We have seen many advisors respond with a version of “let’s review why we provide this service this way, and if you think we should change it we can discuss it.” Although subtle, the message here is “you are wrong, we know how to do this” and stifles the conversation. However, an experienced facilitator knows to respond more like “what do you like most about how that other advisor does it?” Pursuing that conversation gives you vastly more useful information.
- Enable you to be a participant at the meeting and be involved in the discussion of changes clients would like to see in your practice – that cannot take place if you are facilitating yourself. To get real feedback, the meeting must be run by someone from outside the company.
A client advisory board is critical in connecting with your best clients and engaging them in guiding your strategic plan. Run the meeting yourself, however, and attempt to be both a facilitator and participant, and most of those benefits will never be realized.