Effectively Communicating with Clients

By J. David Strother, CFP®, AIFA®, financial advisor at DSF Wealth Management, LLC

Of all the elements a CPA or financial advisor needs to consider in order to operate a successful wealth management practice, an effective client communication strategy ranks at the top of the list. Regular communication is critical to the long-term success of your firm, but it has to be done right.

The fact is that the vast majority of advisors want to sell, but very few know how to effectively communicate with their clients to successfully conclude the process. In order to strengthen your relationships with current clients and continue to bring in new ones, communication needs to be a priority of your firm’s day-to-day operations. It is very difficult to execute effective communication over longer periods of time unless its part of your business model, part of the DNA of your firm.

In my experience, advisors who establish effective communication principles within their practices will see immediate results, while those who do not come off as erratic and anecdotal. Communication is not an event, it is a process that is lived day by day.

Why Effective Communication is Important

Communication has the potential to become the ultimate differentiator in prospecting efforts and then in client retention. In our industry, there is a lot of competition for affluent clients and the frequency and quality of your communication can make all of the difference when it comes to winning their business.

At DSF Wealth Management, we are confident that we will have a much better chance at establishing a relationship with a potential client than our competitors because we know that our communication strategy is much more effective (this is even truer once the relationship is established in terms of earning daily the right to retain the relationship). Once we have an initial interaction with potential clients, they will begin to compare and contrast our efforts with their existing advisor and also any competitors and, in turn, see that we want their business more than others do. Many advisors aren’t aware that this is happening, so we already have an advantage just by understanding the marketplace of effective, focused communication. We are increasing the odds in our favor through our communication efforts.

For our existing clients, regular communication helps confirm that we are thinking of them often and genuinely care about them in the real world. We are sending the message that every interaction we have with clients is carefully thought out ahead of time and done so with a specific purpose.

Communication plays a huge role when it comes to attrition as well. You can’t be part of a large firm and not have some attrition to your client base. When we do experience attrition, close to 100 percent of the time it can be directly attributed to inferior communication on our part and superior communication by our competitors. When we lose an account, it is often because we failed to document something in a meeting or we didn’t follow up, the client became aggravated and started to believe he or she could find a better relationship elsewhere.

When this occurs, we try to find the genesis of the problem and it often boils down to either not listening to the client or listening to the client and not following through. Obviously we want to avoid either scenario and fortunately, these instances are few and far between.

How Much is Enough?

Experts say leading firms communicate with their clients 63 times a year. We believe effective communication goes way beyond that. Between quarterly performance reports and monthly investment statements, general communications, face-to-face meetings, phone calls, the content we send out through MarketingLibrary.net, a service that provides financial content and commentary, and our daily calendar quote that goes out six days a week, we are reaching out to our clients roughly 350 times per year. We want our clients to receive something from us, something that has our name, our logo and our branding as often as possible.

We’ve been pleasantly surprised to hear that the majority of our clients actually appreciate this amount of communication. Only about 1 percent of them have expressed that they are not interested in receiving something every day.

Even more surprising is how often I get a reply to our daily calendar emails. Clients often say that they have been meaning to call and check in and just hadn’t gotten around to it. Our calendar provides them with a simple and easy way to reach out to us and they have six opportunities a week to do so – all they need to do is respond to the daily email. More often than not, clients come back with something that is not directly related to financial planning, investments or insurance, such as a health issue. When we respond to their communications, we are instantly deepening the relationship.

Changing Your Strategy

In general, clients want much more communication from you than you would think. People are attracted to other people who are paying attention to them and communication (in a variety of formats and contents) is the most effective way you can give someone your attention.

If you begin to increase your efforts in this area and force yourself to communicate with clients much more than you think they would tolerate, the vast majority will start to see you differently. It is also a good idea to send something in the mail periodically as this is a good way to separate yourself from someone who communicates only electronically.

When you effectively communicate with your clients, you will start to get more prospects. More prospects lead to more clients and more clients lead to a bigger firm. When you become a bigger firm, you can start to delegate some of the smaller and administrative tasks and this allows you to put more of your focus on prospecting and continuing to grow. Communication is really what starts you on the path to growth.

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J. David Strother, CFP®, AIFA® is Financial Advisor for DSF Wealth Management, LLC. Based in Lafayette, Louisiana, DSF Wealth Management enables a select group of emerging and affluent families to achieve financial piece of mind through all stages of life through tax-optimized wealth management strategies. You can find out more about DSF Wealth Management at www.dsfwealth.com.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame logo), which it awards to individuals who successfully complete initial and ongoing certification requirements.

1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 12750 Merit Drive, Suite 1200 in Dallas, Texas 75251; (214) 294-5000. Additional information about 1st Global is available via the Internet at www.1stGlobal.com.