The prospect of doing client reviews in the wake of the market's performance over the last three quarters is nothing short of dispiriting.
Nevertheless, client reviews remain one of the best tools to deepen client relationships, reinforce your role as a trusted adviser, consolidate accounts and ask for referrals.
In other words, when properly executed, even in the current environment, a client review can be a marketing bonanza.
As a way to build deeper relationships, client reviews can't follow a "one size fits all" model. While each review need not be totally customized, it should focus on what the client wants to get out of the review. If you don't know the answer to that, call your clients and ask if there is any specific information or questions they would like addressed. Even if they don't, they will appreciate your asking; if they do, you will be prepared.
Always begin by asking what is happening in the client's life. Given the current environment, you may want to ask if there have been any changes on the job front. What about their grown children's jobs? Have they delayed any purchases? How are their elderly parents doing?
Every time you meet with a client, you should leave the meeting having learned something new about him or her. Not only does this deepen your relationship, it uncovers opportunities, such as a new grandchild who needs a college savings program or a new job that leaves a 401(k) account ready to be rolled over.
To reinforce your role as a trusted adviser, it is important that you appear in control of your job and office while your client is having his review. Toward that end, always prepare an agenda so that clients know the order of discussion. Typically, advisers like to start with a general market review to put the client's performance in perspective. Clients, however, may be eager to talk about their portfolio performance. An agenda lets them know that their concerns will be covered.
Even if a client tells you he or she knows what is happening in the marketplace, present your overview. You might say, "I know you follow the markets, but there is so much information out there that I have pulled together what is most relevant to you." Presenting the information this way both positions you as the expert and demonstrates your value as an adviser. It also affords an opportunity to counteract some of the current negativity with positive developments the client may not have considered or been aware of.
Since your clients certainly will vary in their level of financial sophistication, their market review material should too. Advisers often assume that a successful businesswoman, surgeon or attorney is equally knowledgeable about financial matters, which is not necessarily the case.
If possible, break information into threes, such as, "There are three key trends affecting the stock market at this time," because this is the easiest way for people to take in what you are saying. Also, since people process information differently, provide it visually and orally. When appropriate, tell a story or give an example.
Usually, advisers present too much information. If you feel you absolutely must use 10 charts, put them in an addendum, but don't overwhelm the client.
Use the review to go over all of all your client's holdings. Almost every investor is revisiting how they have managed their money in the last 12 months. While your clients probably won't move accounts to you just for the sake of consolidation, tell them you would like to analyze their entire financial picture and then get back to them with some ideas.
Assuming that the review has gone reasonably well, its conclusion is a good time to ask for referrals. You simply may want to say, "Many investors are re-evaluating their financial situation and adviser. If you have friends or colleagues in that position, I would like to speak with them. Is there anyone you might suggest I contact?"
Another, less direct approach is to say you would like to work with other people with similar careers and/or goals as your client. For example, "I enjoy helping independent businesspeople like you plan for retirement. If you were me, how would you go about reaching them?" Once you have the client talking about your business, the door is open for referrals.
Libby Dubick is president of Dubick & Associates Ltd., a New York firm that helps advisers and financial services firms develop marketing opportunities. She can be reached at libby@dubickconsulting.com.
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