3 ways client conversations benefit financial advisers


Start with perspective: It’s a strategic client conversation.

The classic ‘client review’ is due for a makeover.

Business Health’s Catscan surveys have shown that 25,000 clients in Australia continually rate the review service delivered by their advisers as by far the worst-performing area from the perspective of client satisfaction.1

Typically, a ‘client review’ focuses on past investment performance—but is that compelling for you or your client? And does it really help focus on their overall ‘best interests’ and holistic financial goals?

In a recent Helping Advisers blog article, we talked about some practical ways to engage clients through visuals and forward-looking conversations about their objectives.

In times of market volatility, it’s tempting for financial advisers to emphasise conversations about investment products and explaining the market environment. But your primary focus should be on building a broader relationship with your client and their family by focusing on their overall objectives. Products and performance are not the main thing: they are means to an end.

Now that we’ve established that a ‘client review’ is a strategic conversation all about your client, let’s take a look at 3 ways such client conversations can benefit you.

1. Client reviews help ensure you’re acting in clients’ best interests.

Imagine a mechanic recommending a battery replacement and charging you for it…without actually looking at your battery. Or a doctor prescribing medications based on an exam she did 18 months ago. These scenarios sound crazy!

Similarly, for you to offer sound financial advice, you need current information—a regular client ‘check up’, if you will. This is especially important for clients who you recently acquired—but have not met yet personally. You may also have FOFA obligations to meet opt-in requirements and provide fee disclosure statements to your clients—important tasks that can be completed in person along with a more in-depth conversation. 

If you focus conversations solely on investment markets and product performance, you will miss out on the fact that your client’s circumstances may have shifted significantly since your last meeting—which impacts the quality of your advice and ignores ‘best interest’ requirements.

Remember: this conversation is about the client:

  • It’s a chance to celebrate, re-evaluate and update. This conversation is a chance for you to get to highlight positive developments in your client’s current financial plan, to re-evaluate the plan in light of their current needs and to update the plan as needed.
  • Explore their family tree: Has something significant occurred (marriage, divorce, health crisis) since your last meeting? Is the client expecting something to occur soon (new baby, property purchase or sale) that will impact the lives of those who matter most to them?
  • Talk about risk tolerance: How does the client really feel about their investment strategy, given the ‘low return, high volatility’ market environment? Have their insurance needs changed based on a development in their lives or family circumstances?
  • Explore new topics tied to their objectives. Perhaps you haven’t previously talked with your client about super, insurance or tax issues. If these topics relate to their long-term goals, a strategic client conversation gives you an opportunity to further explore their needs.

2. Client reviews affect client satisfaction.

Let’s face it: if you don’t see your clients or communicate regularly, they won’t be engaged or highly satisfied—and your clients expect regular communication.

A study conducted by the Association of Financial Advisers revealed that clients gave the highest satisfaction rankings to financial advisers who kept in touch more than eight times a year through various communication channels (average of 9.5) compared with an average satisfaction score of just 7.9 for financial advisers who communicated just twice a year.2

A strategic client conversation also gives you an opportunity to demonstrate value. One approach is to present new options tailored to your clients’ objectives. Even if your clients’ needs have not shifted since your most recent meeting, products and services probably have. Perhaps higher quality investment products are now available or you’ve identified a lower-priced option comparable to your client’s current strategy. A strategic meeting might be an opportunity to present new options in line with your clients’ goals.

3. Client reviews can impact your revenue, retention and referrals.

As discussed above, financial advisers are required to act in clients’ best interests. But that doesn’t mean there aren’t ‘win-win’ scenarios where your clients and your business both benefit from more holistic conversations. If you are providing a broader scope of advice and services to help your clients meet their objectives, your revenue should grow.

Beyond that, deeper client relationships can help with retention. A simple example? Managing retirement accounts for both partners. One recent study found that for financial advisers, the retention rate of clients with no retirement accounts is 85%, one retirement account 86% – but 94% for those with multiple retirement accounts.3

Similarly, if your clients are more engaged and satisfied, they will be more likely to refer you to others. A recent study of Australian investors found that clients were significantly more likely to refer an adviser they rated a 9 out of 10 in a client satisfaction survey than one rated six.4

By re-framing a ‘client review’ into a strategic client conversation, financial advisers can ensure they are acting in clients’ best interests, improve client satisfaction and see positive impacts on revenue, retention and referrals ‘Client reviews’ don’t have to be dreaded by anyone: they are opportunities to grow your relationships by focusing on forward-looking objectives and advice.

Clark, Lara and Sue Viskovic. “How to ensure clients will keep paying for ongoing services.” Financial Observer. 04 July 2013.
Association of Financial Advisers. “Connecting with clients: Solving the communication matrix for financial advice practices.” October 2013.
Klausner, Andrew. “The Keys To Client Retention”. Forbes. 16 January 2014. http://www.forbes.com/sites/advisor/2014/01/16/the-keys-to-client-retention/#6cf4c41334f7
Raissis, Anna. “The satisfaction equation.” Forward Thinking. April 2014. Statistics from Macquarie’s 2014 Financial Planning Benchmarking Report. 


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