Financial Advisor Wins: Focus on Client Engagement

Financial Advisor Wins: Focus on Client EngagementEd Note: This article is part of an ongoing series focused on the achievements made by financial advisors.

Client engagement is a measure of the quality of a client’s relationship with his/her advisor and the impact of that relationship on the advisor’s business growth. Advisors must understand that ongoing, meaningful contact with clients actually drives revenue.

According to Advisor Impact’s Client Engagement Index, sponsored by Genworth Financial Wealth Management, engagement is defined by incorporating four main components of the client/advisor relationship: loyalty, satisfaction, share of wallet and referral activity.

The report titled The Rules of Engagement, conducted in 2013, indicated 28 percent of clients as engaged clients, up from 24 percent from the previous year. The study also revealed key indicators of success for advisors, including:

  • 89 percent of clients said the advice they received played an important (46 percent) or critical (43 percent) role in meeting their financial goals
  • 79 percent of clients said they somewhat agree (46 percent) or strongly agree (33 percent) their advisor adds value over and above market performance
  • 66 percent of clients said they somewhat agree (43 percent) or strongly agree (23 percent) their advisor delivers value relative to fees charged
  • 84 percent of clients said they had a high (31 percent) or very high (53 percent) level of trust in their advisor
  • 64 percent of clients described their advisor as a strong leader, jumping to 84 percent among engaged clients

“The goal is to deliver an outstanding client experience, and then have a growth component as well,” said Julie Littlechild, CEO of Advisor Impact.

Engaged clients feel a strong connection between the advice they receive and reaching their financial goals. Clients described their financial advisor as a strong leader and placed an extremely high level of trust in him or her.

Several factors are essential for clients to feel engaged. By identifying the key factors of engagement, advisors may be able to move clients from feeling “merely satisfied” to actively “engaged”, as categorized in the study. Fundamentals that drive clients toward engagement include:

  • increased frequency of client contact
  • a more personalized client/advisor relationship which focuses on the unique needs
  • circumstances of the client; and
  • expanded services to incorporate other professionals such as lawyers or accountants

“We believe that client engagement is the most critical metric for advisors and for the industry because it reflects both the client experience and the potential for growth. Engaged clients are the most satisfied and loyal.  They place a higher value on the role of advice and they will drive almost all referral growth for advisors,” Littlechild said.

To build loyal relationships, financial advisors need to understand the new basic principles of customer engagement and put them into action. Inc. offers these tips:

Customer engagement exists in a full spectrum of experiences. Customer engagement is no longer a series of one-off experiences – it’s an ongoing dialogue. Companies need to be good listeners in the digital age and that requires a new set of skills. So, jump into conversations in a genuine and human way. Foster trust and form relationships through open, honest interactions over time – interactions that create positive experiences and outcomes for your clients. Positive outcomes include: answering questions, solving problems, hearing ideas and supporting them (when possible), and also amplifying praise.

It needs to be results-driven. Although communication with your clients is an ongoing dialogue, you need not be chatting just for the sake of it. When you engage your clients, have a goal in mind such as improving your product or nurturing loyalty and increasing sales. Nurturing an ongoing and genuine relationship with your customers will make a major impact in both these arenas naturally.

It happens anytime, anywhere. You want to be able to interact with your customers in the context of their daily lives. Not only are you able to provide them with better, more immediate service, but you also gain loyalty and stay in the forefront of their minds.

It’s considered mutually beneficial. The new customer engagement strategy should feel less like a marketing and sales campaign, contest or tool and more like a well-developed friendship founded on the basis of interdependent needs and mutual respect. The feedback you get from your customers isn’t just important for you, it’s important for them also. If you can listen to what your customers are saying and improve their experience, everybody wins. You get more loyal customers and they get what they really need and want.

The relationship you build is a two-way street. On one hand, your customers feel heard and they can see the ways they’re actually contributing to your company. At the same time, you get free feedback and have the opportunity to improve your business, thereby attracting more customers.

It’s truly customer-driven. Remember the days when cold-calling was part of the marketing strategy? Now, imagine the opposite of a cold call because that’s how customer engagement works today. Your customers decide if and when to communicate. Your job is simply to give them the tools to make the interaction and communication easy and natural. Not only should these tools be easily accessible and highly visible, but they should also offer options for different types of conversation. Do they have a question? Do they want to post a rave review? Are they experiencing a technical difficulty? Present your customers with an intuitive tool for communicating with you and let them initiate.

When you put control in their hands, you’re more likely to be able to meet their needs, but you also win their trust and, ultimately, you build the loyal customer base you need to grow and succeed.

For more information on Summit Brokerage Services, visit or contact us at (800) 354-5528.

Summit Brokerage Services is a member of Cetera Financial Group, RCS Capital Corporation’s (NYSE: RCAP) retail investment advice platform.

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