In the ever-growing world of technology, client communications have become more of a challenge for independent financial advisors. The reason isn’t because it’s difficult to find a way to communicate with clients, but because there are so many options, it is difficult to determine what advisors should be doing with their clients. As an advisor, ask yourself the following questions regarding communications:
- What channel should I use for communication?
- Are in-person meetings best?
- Where should I meet?
- Are phone calls preferable?
- Is an email better than a phone call?
- How do I fit in one-to-many communications like newsletters and social media?
In a recent study of the Association of Financial Advisors – Connecting with Clients it suggests one-on-one meetings are still the preferred form of communication for clients. However, there are a lot of different preferences regarding the various aspects and details of communications. The location of the meeting is more important than one might think. Some clients prefer a more informal meeting location, from time to time. Additionally, clients don’t always want a traditional meeting, where the subject matter is all business. Some clients prefer different mediums such as email, phone calls or other communication methods. Not surprisingly, to mix it all up, layered on top of all these variables are differences in communication preferences amongst Baby Boomer, Generation X, and Generation Y clients. In addition to these challenges, the study reinforces several significant concepts surrounding effective client communication, including the correlation between client communications and increased client satisfaction, retention, and referrals. Additionally, and more surprisingly, the more communication channels you use, the higher the client’s satisfaction. The study divides the different types of communication available to advisors into two broad categories: One-to-one personal communication with clients (meetings, email, phone calls), and one-to-many communication (newsletter, social media). Generational Differences Starting with one-to-one communication, there are some differences in communication preferences across the generations. Meeting in-person is the leading preference among all generations, but there is no particular preference for the type of meeting. Overall, communication by email was the most desired communication method, more than any other meeting type, including at advisor’s office, at the client’s location, or an informal meeting. Regarding the meeting types, this is where the substantial generational differences take place. Both Generation X and Y’s preference for formal meetings at the advisor’s office was half that of Baby Boomers. Generation Y showed a strong preference for informal catch-ups. Unexpectedly, all groups showed a preference for email communication over telephone calls. In fact for Generation X, they love emails more than any other type of communication, including meetings. Conversely, as a primary communications medium, none of the generations (even Gen Y) preferred texting or video meetings via Skype.
As for one-to-many communication, more generational differences emerged in the study. Generation Y preferred digital/social media communication as a one-to-many tool. Beyond social media, Generation Y also had a strong preference for electronic newsletters as a second alternative and, not surprisingly, they didn’t like to receive anything printed including newsletters. Furthermore, even though Baby Boomers preferred printed materials, it still isn’t substantial, with less than 20% preferring this method.
Why Advisors Should Focus on Communications Based on the AFA study, the advisors who were good at delivering client communications also had the most satisfied clients and, consequently, received more referrals from them. In addition, the volume of client communication channels has a correlation to client satisfaction. The magic number of communication channels is five and, once you add more, the law of diminishing returns starts to appear.
What does it All Mean?
- There is a clear “more is better” relationship with client communication. The more communication channels you use with clients, the more you improve your client satisfaction. The survey suggests targeting five, while five+ may add more to the client’s experience, the benefits start to diminish.
- Have a varied one-to-one communication channel mix. Advisors rely too much on formal meetings at the advisor’s office and phone calls. Instead, utilize informal catch-ups and email.
- You must have at least some one-to-many communication such as a newsletter or social media. All generations confirmed the amount being done was less than preferred. If you’re not using Marketing Library or American Lifestyle magazine as one of these communications methods, you should, they are extremely effective.
- Advisors extending their client base should be mindful to broaden their communication channels, as well. Especially Generation Y clients, who demand and expect communication on a broader range of communication channels. Even though there was a strong preference for Generation Y to want more social media, they still want one-on-one meetings and emails.
- Despite all this information, client meetings are still the most preferred method of communication.
At the end of the day, make sure you use a combination of at least five different communication channels made up of both one-to-one and one-to-many. If you want ideas for adding the most effective client communications, please contact myself at 561-338-2698/ email@example.com or Ria Jernberg, Director of Practice Management at 561-338-2663/ firstname.lastname@example.org. For more information on Summit Brokerage Services, an independent broker-dealer, visit www.joinsummit.com or contact us at (800) 354-5528.