Frequent Contact, Plan Knowledge Can Help Advisers Earn Business

Among respondents to YCharts Inc.’s Advisor-Client Communication Survey, which sought to understand how adviser strategies align with evolving client preferences, 26% felt the adviser for the client’s employer-sponsored retirement plan was a factor influencing the client to sign on privately with that adviser.

The top three factors that influenced clients’ decisions to enlist the services of their financial advisers were referral from family, friend or network (51%), personal relationship (40%) and positive online reviews or testimonials (31%), followed by experience in an employer-sponsored retirement plan.

“Individuals may naturally seek advice from advisers who understand the intricacies of their retirement plans,” says Kara Hughes, YCharts’ vice president of marketing. “However, frequent and effective communication is essential in adviser-client relationships, whether individuals discover their adviser through employer-sponsored retirement plans or other avenues.”

When it comes to retention and referrals, communication is of vital importance to client confidence, according to a YCharts report based on the survey. Respondents who were frequently contacted by their employer plan adviser—monthly or more—said they were very comfortable with their financial plan (71%) compared with respondents who were infrequently or rarely contacted—every four to six months—by their adviser (43%).

Wealthier clients reported a preference for more frequent communication from their advisers. Additionally, most clients with greater assets under management said they have either changed or considered changing advisers in the past year, emphasizing the importance of timely engagement, the research highlighted.

Nearly four out of five participants said that more frequent or personalized communication from their financial adviser would enhance their trust, increase their loyalty and make them more likely to recommend the adviser’s services to others. This sentiment was even stronger among clients aged 30 to 44 and those with at least $500,000 in assets under management. The research noted that providing top-tier service to your most significant clients can be difficult to sustain.

“Enter: the ‘champagne or sparkling water’ analogy,” the survey suggested. “It would be time-consuming to send a personal note to every client over any period of time. But serving those higher-value clients’ champagne (a lot of personalized communication) shows how much you value your relationship with them. Other clients might not warrant as much personalized contact but would still appreciate sparkling water every now and then.”

With new clients joining and existing ones’ preferences evolving, maintaining a consistent communication strategy is key, the YCharts report stated. This could involve setting objectives such as sharing weekly insights on LinkedIn, sending out biweekly newsletters via email, publishing monthly market updates on a blog or scheduling quarterly calls with high-net-worth clients.

The survey added that while most clients rely on their adviser or investment account platform for market updates, many also seek information from financial blogs, podcasts and social media. Clients have also expressed interest in diverse topics.

“Experiment with new communication methods in an effort to better resonate with clients,” YCharts advised. “For instance, a podcast covering market trends and news might effectively reach one group of clients, while a blog covering the latest tax planning techniques may strike a chord with older clients who are approaching retirement.”

The survey drew responses from 775 Americans who work with a professional financial adviser. The responses were sourced via SurveyMonkey in February.