“You're looking for referrals? You seem so busy; I didn't think you were taking on new clients.”
That client exchange was an eye-opening moment for one adviser who'd been struggling to understand why the firm's most engaged clients weren't sending more referrals. The reason, it turns out, was the adviser never asked.
Advisers seek the wisdom of peers and experts in their constant efforts to do things better, yet most neglect a better source of intel — their own clients. That's a big mistake, considering 89% of businesses intend to compete by delivering a great client experience, according to Gartner Research.
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Competing on the basis of experience goes beyond client satisfaction. Providing a higher level of service engages customers and makes them feel invested in the firm. Advisory boards provide feedback that can help firms deliver the kind of experiences that turns clients into their advocates.
While surveys can be useful, regular meetings with clients can provide deeper insights on a firm's offerings, pricing and the quality of service, among other things. RIAs can use that feedback to enhance the client experience and address those issues that lead to dissatisfaction.
We know of many RIA firms that have received valuable feedback from their client boards. Here are a few examples:
• “Don't change too much. There is a lot we love, and that's why we're here.” One firm was looking to make significant changes to its offerings, technology and communications, but the clients worried about losing the things they liked. The board counseled the adviser to use a light touch.
Lesson learned: While firms need to continue to evolve to stay relevant and competitive, preserve those elements that drive value.
• “You shouldn't use 'Money' as part of your firm's name.” As part of a rebranding effort, one firm briefly considered adopting the name of their highly successful money-themed blog as their new firm name. But a client told the adviser to reconsider such a move.
Lesson learned: A brand that works well in one forum may not translate into other areas.
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• “It would be nice if you also reviewed estate documents.” When one adviser was describing the range of services his firm provides, a client asked if the firm could introduce estate planning, a service the firm already offered.
Lesson learned: When working with clients, be specific about the services you provide that can help them pursue their goals.
As you consider building an advisory board, think carefully about your goals, which clients would be a good fit and how you will process the feedback generated. A few suggestions on how to get started:
• Choose members wisely. Client advisory boards typically have eight to 10 members and gather two to four times a year. Members should be your ideal client, those who are committed to your firm, who are willing to provide candid feedback and who recognize their interests are served by helping your firm improve.
• Set expectations at the start. Spell out the objectives you have for the board, the time commitment you seek and the benefits clients may realize as participants. Board members usually serve for a defined term, such as two years, which lets advisers introduce new faces and fresh thinking over time.
• Plan ahead. Plan out the event, including location, refreshments and agenda. Understand what you hope to learn for each of the topics listed. You might also consider hiring experts to facilitate the meetings or provide consultation services.
• Close the loop. Debrief your firm's leadership team to evaluate feedback, identify next steps and think about the next meeting. Create a follow-up communication for clients, identifying key takeaways and how that feedback led to action.
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We understand many advisers have shied away from creating advisory boards because they take time and require a commitment to engage with clients and identify the right members. Ultimately, though, we believe feedback generated by these boards is well worth the effort.
Vanessa Oligino is director of business performance solutions at TD Ameritrade Institutional.
