Toolbox: Front and Centred

By David Christianson | July 18, 2005 | Last updated on July 18, 2005
6 min read

(July 2005) If I make my living selling mutual funds and investment products does that mean I’m in the funds business? Or am I really in the people business?

If the market drops, do I need to figure out why? Or should I instead get on the phone to my clients, reassure them, find out what’s going on in their lives, and how they are feeling about the market’s ups and downs?

When I started out in the insurance business some decades ago, I had no clients. So I had time to develop a fascination for products, tax strategies and the like. It’s little wonder I made no money. But then I noticed other agents never talked to clients about product, but rather asked them about their lives, dreams, families, and fears. They made money.

Fast forward to 2000 and my team and I had developed a solid financial planning clientele. But our service was not about products. It was about helping clients reach their goals. Everything else emanated from there. We named our method “The Goal Achiever Process.” We visualized our practice to be like a one-stop website clients could visit for all their needs — financial and otherwise.

My next epiphany came when I read The Strategic Enterprise (Stoddart) by Bill Bishop. I realized although we’d made progress toward becoming client-centred, we still had a long way to go. His example tells how a sporting goods company, in its attempt to refocus its marketing strategy, learned its primary product, basketballs, could be made far more cheaply overseas. This forced executives to home in on the uniqueness of the customers. What did they really need and want? And what would they buy that had higher margins and higher value, for both them and the company?

The answer was they loved basketball and sport, not basketballs. By developing services geared toward the needs of their clients, the company quickly built a loyal following among basketball players, coaches and fans. They became are seller of a range of products, and farmed out the production of goods, including basketballs, overseas.

Getting to Know Your ClienteleI got so excited by the concept that I wrote a course called The Structure of Client-Centred Practices for the Knowledge Bureau. I focused on how this client-centred model could apply to financial advisors. I asked readers to consider how to make the staff at their practices the “go-to” people for high-value clients, and how to position other suppliers and advisors as commodities.

How can you focus on what your clients really need and add the extra value to set you apart? First, identify your clientele’s common characteristics, such as age, level of interest in investing, occupation, family structure, retirement horizon, assets, income level and investment approach.

The best way to obtain these details is to use focus groups. While expensive (especially if you provide food and drink), they can give you great information. Hire outside facilitators to get better answers. Work with small, manageable groups, welcome them personally to the event, schmooze a little and then leave so the facilitators can do their jobs. You have to be ready to hear both the bad news as well as the good about your service quality and delivery, and demonstrate a response.

Questions you need to ask include: 1. What are we doing right? 2. What do you value most about what we do for you? 3. What more can we do for you? 4. What issues concern you?

Have the facilitators ask about both financial and personal matters. The goal is to find out what your clients need, not only from you, but to make their lives better in general. For instance, they may be having problems finding honest home renovators and car repair centres, superior Internet service providers or travel bargains. Maybe they need an exercise routine they can consistently follow.

You may find many of your clients aren’t terribly concerned about money, so long as you take care of it well and there’s enough to do the things they love. So let them look to you as a source for their more personal needs.

Many advisors argue it’s not our role to be counsellors or travel agents, and they make a valid point. A middle ground is to find those other experts and become the link to them. As we did, think of yourself as that one-stop website for clients. Determine the best providers and supply the links. If you’re serious about building a better practice, you’ll make the effort to serve all the needs of your desired clientele.

Three things make up my definition of a client-centred practice: 1. Focusing your time on client contact. 2. Designing your practice around the needs of your clientele, not your products. 3. Investing the time to really find out about each client and responding appropriately to his or her needs.

You need to have sincere conversations with each client. Develop a process to encourage, or even force them to tell you what they want from life, what makes them happy, who they care about and what they fear.

Be nosy. We use an annual meeting process that starts 45 days prior to each client’s anniversary with us. We book a meeting time, send out a draft agenda, a vision and goals questionnaire and are quest for new information. We also ask them to provide any documentation we may be missing. We ask for this information prior to the meeting so we can shape the agenda to their particular needs, then meet and develop a revised financial plan.

The vision questionnaire reveals a lot. For two years, one client had consistently resisted completing it. Finally she filled it out and said, “Those questions you asked changed my life!” I thought she was teasing until she explained the questionnaire helped her confront a major problem. Her life long goal was to write a book. To do this, she needed to use a computer to conduct research online and to send e-mail. There was one problem: she was slowly going blind. For years, she’d tried to reverse the process and improve her eyesight. But it wasn’t medically feasible. The questionnaire forced her to confront this reality and helped her find another way to solve the problem — she purchased a voice-activated computer. She’d resisted completing the survey because, being my client for years, she felt I already knew her. In fact, I only knew certain things.

More proof comes from research produced by John Bowen and Robert Clark in 2001. For a study called The Best of Times, they asked investment advisors (IAs) how they spent their time and divided them into either investment-centred (time spent speaking with peers, analyzing the markets, strategizing about their businesses and responding to client inquiries) or client-centred (immediately responding to client inquiries, reassuring clients, talking to current clients, meeting with clients and personally contacting prospects).

The IAs who were client-centred accounted for only 14% of the total. But they’d acquired six times as many new clients and five times as many assets in the previous six months as those who were investment-centred. In other words, client-centred IAs made a lot more money.

Becoming really client-centred takes continual commitment and effort, but it’s worth it. My rewards were initially more personal than financial, but as wealthy clients began dragging in their friends, the financial dividends followed suit and are now materializing in spades.

David Christianson is a fee-only planner and investment counsel with Wellington West Total Wealth Management, and a speaker with the Knowledge Bureau.

This article originally appeared in the July 2005 issue of Advisor’s Edge.


David Christianson