Four Ways to Better Serve Your Clients

Executive summary:

• We demand and require personalized service in many areas of our lives – from choosing our favorite seats on an airplane to explicit coffee orders
• Personalization is important in wealth management too as clients want to feel their advisors see them as a unique individual with specific needs and goals
• Personalization has become key for building client satisfaction, confidence and loyalty
• To make your practice more personalized, consider the four aspects of personalization: service, education, appreciation and investment recommendations

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Is customization and personalization really that important to clients? The other night at dinner, my husband Eric and I were talking about how much people crave tailored experiences these days. I hear about the need for personalization all the time, but I wanted to dig deeper into what it truly means for financial professionals as we engage with clients every day. How do we differentiate ourselves from the competition?

Eric jokingly called me high maintenance during our conversation. Naturally, I disagreed, claiming that I'm patient, laid back, and don't require much special treatment. He challenged me, saying, "Think about your life and how much you demand others to personalize based on your needs and desires. I bet you'll find that you demand a lot from everyone around you." Determined to prove him wrong, I decided to track my own demands over the past week in both my work and personal life.

Let's start with my travels this week. I always choose my exact seat on flights, sometimes even paying extra for the perfect spot. Southwest was the exception, but they're now giving in to customer demands by allowing seat assignments soon. I pick flights based on the shortest travel time, often avoiding those with connections. At the airport, I swing by Starbucks to order a nine-ingredient coffee that costs a pretty penny. I don't buy Starbucks often, but when I do, it must be just right.

When I arrive at my destination, I check into my hotel and request a room near the elevator, fully expecting an upgrade based on my status. For dinner, I browse the menu and place an order with three special requests, modifying the dish to my liking.

As the week went on, I started to realize that maybe I'm not as easygoing as I thought. To Eric's delight, I admitted that I do, indeed, expect a lot. Just like our clients, I demand and expect personalized service. Embracing this reality and meeting these expectations is what will help set us apart from the competition.

Soon after, during a regular meeting with my colleague Jack, we started discussing advisor-client relationships and the importance of personalization and customization. Clients no longer want a cookie-cutter approach; they want to feel confident that you see them as unique individuals with their own specific priorities. As their advisor, it's crucial to show that you are laser-focused on these priorities.

Indeed, our annual Value of an Advisor study has invariably found that providing a customized wealth management experience holds significant value for investors. Personalization of engagement in the context of service, education, appreciation, and investment recommendations is critical for the future success of advisors because it allows for a more holistic and client-centered approach. Here's how it ties into each aspect:

1. Personalization of service:

• Tailored communication: Personalized service means understanding how each client prefers to communicate, whether through emails, phone calls, or in-person meetings. This ensures that clients feel comfortable and valued.
• Customized service commitment: Advisors can offer services that match each client's specific needs and circumstances. For example, comprehensive financial planning may be needed for high net worth clients, but a more simplistic, easy-to-understand plan may be appropriate for others.
• Proactive engagement: Anticipating clients' needs and reaching out with relevant information or services can enhance the client experience and satisfaction.

2. Personalization of education:

• Relevant content: Providing educational resources tailored to the client's financial knowledge, life stage and priorities can make learning more effective and engaging. For example, offering beginner investment education to new investors and advanced strategies to more experienced clients.
• Learning preferences: Understanding whether a client prefers reading articles, watching videos, or attending seminars can help deliver educational content in the most impactful way.

3. Personalization of appreciation:

• Recognition of milestones: Acknowledging important personal and financial milestones, such as birthdays, anniversaries, promotions, family milestones, reaching a savings goal, and finally retiring, shows clients that their advisor pays attention to their lives and achievements.
• Personalized gifts or rewards: Sending personalized gifts or rewards based on clients' interests and preferences can foster goodwill and strengthen the advisor-client relationship.
• Customized appreciation events: Hosting events or gatherings that align with clients' interests and preferences can create a sense of community and loyalty.

4. Personalization of investment recommendations:

• Risk tolerance and goals: Tailoring investment recommendations to match each client's risk tolerance, financial goals, and time horizon ensures that the advice is relevant and suitable and is table stakes in planning today.
• Ongoing adjustments: Regularly reviewing and adjusting investment strategies based on changes in the client's life circumstances, market conditions, or goals ensures the portfolio remains aligned with their needs through active management or a blend of active and passive investments. (Addressing things like risk mitigation, allocation and location of assets, distribution strategies, and active tax management.
• Identifying the level of customization needed: Gaining expertise in certain client demographics or groups. (Business owners, women, landowners, and so on.)
• Portfolio customization: Creating investment portfolios that reflect the client's values and life concerns gives the client confidence that the advisor can offer solutions that address the complexity of their lives. This often requires the advisor to evolve their investment philosophy, discipline and inventory management to address client needs. Evolution decisions include:

1. The ability to address industry exclusions based on client values
2. Proactively addressing tax concerns and challenges from concentrated positions, large, deferred comp payouts, future property liquidation and inheritances.

The bottom line

With wealth comes complexity, which makes personalization more important for client satisfaction, confidence, and loyalty. It can also enhance the overall effectiveness of the advisor's practice. This comprehensive approach can help ensure clients receive the most relevant and valuable advice, fostering long-term relationships and success.