The Financial Planning Association (FPA) recently released its third practice management research report through its Research & Practice Institute (RPI). The focus is “Client Communication” and the report touches on many of the topics one would expect, such as frequency and type of communication, segmentation of clients and service level and the growing use of technology in communicating with clients.
What is found in the report is the same as what I encounter in my work with clients on a daily basis. What I hear is this:
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A client service plan is needed
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It should encompass different levels of service and communication based on client segmentation
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The result would be scheduled and proactive communication
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Clients would know what to expect
What I find in my work with clients on the subject of communication and service plans are the following best practices:
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Identification of the Ideal Client – this step alone will make the development of your communication/service plan that much easier. This topic was addressed in the earlier RPI study. Only 25% of advisors said they had a formal definition of their ideal client.
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Defined client segments – with corresponding communication/service plans. 71% of advisers in the survey say that they segment their clients; yet only 56% have formally defined service standards.
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A communicated service plan – 74% of advisors surveyed communicate the service plan, while only 15% deliver a written service agreement.
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A disciplined approach – with adherence to the defined Ideal Client(s), client segmentation and communication! Only 30% of those surveyed review the communication/service standards on an ongoing basis.
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Use of technology – to manage and deliver the service plan. The survey report did not address whether advisors use technology to manage the outreach side of client communication. That is, the scheduling of meetings, issuance of written communications, etc. However, 80% of the advisors indicated they use a CRM. We can let the following statistic inform our thinking on the use of the CRM for outreach. Only 41% of the advisors documenting the details of client review meetings are entering the notes and follow-ups directly into their CRM. I have a sneaking suspicion that a similar or perhaps lower percentage of advisors use the CRM to plan their outreach.
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Ability to be proactive – in client communication and service. The CRM is the tool to make this happen. 80% of you have one – use it!
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Solicit feedback – on the communication/service plan. We often think we know what clients want and 77% of advisors in the survey indicated their client communication process was somewhat or very effective. Ask instead of assuming. A great resource for this is Adviser Impact and Julie Littlechild, the same firm charged with gathering and compiling the data for FPA’s FPI studies.
The report also delved into issues involving:
- Spouses and the lack of participation by one member of a relationship
- Engaging children of clients
- The increase in virtual meetings
- Enhancing service with the use of agendas for client meetings
- Focusing on the quality of client meetings with the use of key life planning questions
Download a copy of the report here and read more about what your peers are doing with their communication and service plans.