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Are you having the right client conversations?

Posted on 18 Nov 2020

Since we moved to Risk Level 1 of lockdown, it is seemingly ‘business as usual’. However, as the dust begins to settle and we approach the last three months of the year, the impact that COVID-19 has had on businesses is becoming very clear.

Businesses are dealing with pressure to try and recover lost time and income during the lockdown. As we know, client-facing activities are one of the most important factors contributing to the profitability and sustainability of an FSP. Therefore, to ensure progress toward the business goals and business continuity during the lockdown, while at the same time capitalising on business efficiencies, financial advisors had to adapt and consider both virtual and face-to-face client interactions. However, even though virtual communication has become a new norm, not everyone is comfortable with it yet. The reason is that many social cues used to read the client (like direct eye contact or body language) is more difficult to understand over a screen. And even though some clients are open to meeting in person now that we are in Risk Level 1, not all are open to this idea and may still prefer to communicate virtually. As a result, retaining clients and fostering relationships with prospective clients have proven to be more challenging as the conversation may not flow as easily. There may also be a need for a broader type of conversation during what remains a difficult time and in this new virtual world we live in.

Ask yourself the following questions:

  1. Have you considered a communication strategy that addresses different client preferences, e.g. clients who prefer face-to-face interaction, however the financial advisor does not, or vice versa, clients who prefer virtual meetings, yet the financial advisor prefers face-to-face interaction? 
  2. How does one embed some of the more permanent efficiencies we have been exposed to during lockdown, e.g. a combination of virtual and face-to-face interaction?   
  3. Do you feel equipped to sustain and retain existing and prospective clients through virtual or face-to-face communication? 

In this newsletter, we look at ways to create client engagement and deepen the client relationship through virtual or face-to-face conversations, leading to client retention and growth.

As you know, part of preparing for a meeting with a prospective client includes gathering an array of information about the prospective client. This information could be used to highlight the similarities between you or the FSP and the client, e.g. sharing the same values or hobbies which creates a human connection and sense of familiarity. It sparks an opening for a meaningful conversation, which in turn may provide you with insight into understanding the driving forces behind client behaviour and decision-making, which is often largely motivated by their emotions. This conversation may allow you to uncover additional needs and objectives which can help you anticipate future needs, be proactive and personalise your service offering to them.

Not everyone is concerned about market volatility. Some are concerned about their families, their future or experiencing a sense of loneliness during this time. Some of these conversations might not be directly linked to typical financial planning and therefore using open-ended questions which focus on the ‘What’ and ‘How’ as opposed to only ‘Why’ would help the conversation flow more easily. For example, types of questions could be, “How do you see your life unfolding in the next twelve months?” or “What are the two things you have learnt regarding your finances, your life, family, goals and dreams during COVID-19?”

Open ended questions provide an opportunity for clients to seriously think about the questions which in turn, might result in opening up about their thoughts and experiences and provide you with insight regarding ‘how’ they arrived at their decision-making and ‘what’ factors influenced this.

As you may know, understanding clients allows you to provide them with a solution which they are more likely to buy into and a financial plan they are more willing to commit to because they will understand the motivation behind the specific solution and how it aligns with their needs and objectives. As an additional benefit, you will also comply with legislative requirements, as per Section 8 of the FAIS General Code of Conduct, to obtain as much relevant information as necessary from the client to provide them with suitable advice.

According to a study by MetLife Australia one of the most important attributes clients look for when choosing a financial advisor is that they genuinely care (65%). One of the participants in this study shared the following as one of the reasons for recommending their financial advisor, ‘A long-term relationship and they care about us. Not cheap but cost is not always everything. The service we get is exceptional’. This highlights the need for conversations beyond their financial objectives.

In order to elicit appropriate information from prospective clients, there should be a level of comfort during the initial client meeting, which makes it easier for the trust relationship to form. During the past few months, we have heard from many financial advisors that they are finding it more difficult to connect with prospective clients during virtual meetings. For example, how do you deal with a prospective client where you might lose eye contact during the initial meeting or where the prospective client’s body language gives the impression of discomfort as though they need to be elsewhere or that they are uncertain about the format or content of the meeting. In order to ease such discomfort, we suggest that a meeting agenda and possible meeting duration is provided before the time. Starting off the virtual meeting by confirming the approximate duration and checking in with the client whether this is still suitable, helps to ease possible uncertainties or discomfort. This way the client knows what to expect and might feel a sense of comfort during the meeting. Depending on Wi-Fi connection, consider whether the video should be turned on or off (bearing in mind that face-to-face connection makes the meeting feel more interactive and ‘human’), which time of day is best suitable to the client and how to ensure the client is involved throughout the meeting.

In an article by Jane Rusoff from ThinkAdvisor, the suggestion is that the ideal length of time for a virtual meeting is 45 minutes, as experience has shown that virtual meetings could be more strenuous than face-to-face encounters.

When it comes to discussing less positive topics, such as unfavourable investment returns, it is expected that clients might display negative or stressed behaviours, whether the client interaction is face-to-face or virtual. Acknowledging these will set the client at ease, in that showing emotion is understandable. By encouraging the client to express their concerns, listen actively and respond with an appropriate level of empathy and compassion, continues to build client trust.

When engaging with a prospective client who is switching from their current financial advisor, it is not unusual to ask why they felt the need to leave. This may uncover those elements that enhanced the client engagement for them and those that did not work well for them. This insight can be used to strengthen your relationship with them.

The recommendations above touch on client behaviour and emotions, which adds a new, possibly deeper dimension to the relationship and allows the financial advisor to expand conversations to include broader discussions beyond purely the financial plan and the client’s financial objectives. Broader discussions could include a range of topics, including the clients’ future goals and aspirations; job transitions, new careers or planning for retirement; potential expenses for their own care; and their family members finances. A national study by AIG Life & Retirement and the MIT AgeLab, which surveyed more than 2,000 financial clients between the ages of 30 and 75, found that clients’ trust in, and satisfaction with their financial advisor increases when both parties are willing to broaden their conversations and engage in a more transparent, holistic approach to financial and future planning.

The survey respondents from this US study were asked about the role an ideal financial advisor should play and the following roles were identified. More than half (54%) said ‘helping me plan for the future’. More than one-third of younger clients, between the ages of 30-45, reported that they view their ideal advisor as a life coach (40%) or friend (35%). They also note their financial professional’s network (53%), as a key driver of satisfaction.

Lastly, personality (48%) was also listed as a key driver of satisfaction. Clients place high value on financial advisors who are able to communicate and collaborate effectively.

Two topics highlighted from this study identified the need for having broader conversations with clients were: (1) their concern regarding identity theft and fraud prevention and (2) physical health and retirement.

Identity theft and fraud prevention

It is common knowledge that there has been a significant rise in cybercrime, which was confirmed when Interpol issued a warning of an ‘alarming’ rise of cybercrime during the coronavirus pandemic. This topic was specifically a concern for older clients (ages 61-75) yet who, despite this concern, were identified as the least likely to have had a conversation with their financial advisor.

The research identified that only 30% of all clients who partook in the research have had this conversation with their financial advisor, leaving 70% of all clients who had no such conversation.

Food for thought

Consider the value added to your clients by highlighting the risks of cybercrime and the possible impact and how they can protect themselves. Have you had this conversation with your clients? Could this be an opportunity to differentiate yourself from competitors? Could it be worth hosting a webinar or referring clients to resources who will be able to help with creating awareness and understanding on the topic? Finally, how are you protecting yourself and your business against possible cybercrime?

To learn more about how to identify and avoid cyberattacks, try the Cybersecurity Online Course.

Physical health and retirement

The study highlighted that approximately 60% of older clients (ages 46-70) have not discussed this topic with their financial advisor and indicated that they either want to or are willing to if the topic was raised. When talking about physical health, the area respondents were most concerned with, was their financial plan for retirement. Broadening conversations in this sphere, could, for example, include helping clients prepare for retirement not only financially but also mentally. In other words, starting conversations about how to plan ahead of time for retirement by phasing in new hobbies, build individual and group relationships and/or contracting part-time employment opportunities. All of these contribute to preparing your clients toward the achievement of value and meaning during their years in retirement.

An article in FAnews by Gareth Stokes mentioned that it is often harder for those in high-ranking positions to transition from their current position to retirement. The reason being, that in these positions they received a lot of attention and were seen as a critical element to ensuring the success or failure of the business. Therefore, having these conversations and helping them implement alternative, non-financial plans into their lives will help them create a meaningful life post-retirement, minimising the risk of them experiencing anxiety, depression and stress. Having these deeper types of conversations, shows that you can be trusted because you have your clients’ interests at heart. A positive impact of this type of interaction is that ultimately it is also in the best interest of the business, as it builds ongoing trust which leads to client retention and referrals. These clients may have friends who are in the same boat and should your suggestion work well for them, they may turn to their friends and say, ‘You should speak to my financial advisor’.

Food for thought

Have you identified these or other concerns your clients might be facing? How are you able to support your clients either by having broader, more in-depth conversations or referring them to specialists?

According to the AIG Life & Retirement and the MIT AgeLab study, lack of personal connection is one of the top four reasons for leaving a financial professional. The key message here is that we are human beings living through a pandemic. Therefore, even though meeting specific financial objectives are important, e.g. having enough money for retirement, it is not the only concerns clients have. At the end of the day they are human beings who are thinking about their well-being and could be feeling isolated. Many have started assessing their lives in more depth as a result of these unprecedented times. They need, and would appreciate someone who wants to listen, understand and make sense of their concerns rather than profile them based on a checklist and present them with an automated financial plan. These non-financial related conversations are the right type of conversations to have because they will deepen your client relationships and differentiate your service offering creating intangible value. This is what will lead to client loyalty, retention and growth.


A national supplier of risk management services to independent financial advisors and other licensed financial service providers (FSPs). Established in 2004, we help our clients overcome their risk management challenges so they can grow and thrive in an increasingly regulated industry. Providing professional guidance and practical support, our team of specialists is passionately committed to delivering tangible solutions.

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