When Earl Kaplin put together a detailed introduction process for working with new clients this past November, the advisor with Assante Capital Management Ltd. in St. Laurent, Que., was feeling pretty good about it.

“We had developed the plan in conjunction with a business coach,” Kaplin recalls. “It covered how we got the prospect’s name, making him or her a client — and everything in between. Our coach told us, ‘You have to do it this way.’”

However, his client advisory board — a panel of eight of his best clients — didn’t agree.

Over a gourmet five-course dinner at a private supper club, Kaplin and his partner, Jeremy Hampson, walked the CAB through a 15-minute presentation on the process, including the questions they’d like to ask new clients early on in the relationship.

“Our board members said, ‘Whoa, whoa, whoa — you are going a little bit too quickly with this,’” Kaplin says. “They told us they would never give us that information at that point.”

A CAB is a panel of eight to 12 clients who meet annually, biannually or quarterly to act as your business’s sounding board.

“It’s any consistent meeting with a group of clients to discuss issues about the business that ultimately affect clients,” says Julie Littlechild, president of Toronto-based research firm Advisor Impact Inc. “It allows you to dig deeper into strategic issues, which you could never do with a written client survey.”

Littlechild estimates that less than 10% of advisors have a CAB.

“Many advisors start one and then stop after the first meeting,” she says, “because they weren’t certain they got full value from it.”

There is no doubt in Kaplin’s mind as to the value of his CAB. In the eight years he has had a CAB in place, he has asked clients for insight on a variety of topics.

“We’ve had some really great ideas come out of it,” he says. “If you’re not asking your clients how you’re doing, who is going to tell you?”

In fact, the most common mistake advisors make when creating a CAB is not understanding why they’re doing so in the first place.

“You need to be clear up front about what your objective is,” says Jan Sampson, vice president of channel initiatives at Toronto-based Assante Wealth Management Canada Ltd., which recently began promoting CABs among the firm’s advisors as another means of gathering client feedback.

Having a specific goal in mind — be it broad (improving customer service) or narrow (easing clients through a transition to a new firm) — as well as assembling a dynamic mix of members, running an efficient meeting and acting on CAB members’ input makes for a CAB that will lead to stronger client relationships, enhanced systems and, perhaps, even a few client referrals along the way.

Here is what you need to know to develop a CAB for your practice:

> Choose A Diverse Mix Of Clients. When considering potential CAB members, Bruce Peters, president and CEO of Pittsford, N.Y.-based CABHQ, recommends prioritizing a list of 25 clients and narrowing it down from there.

“Look at the list for any type of diversity that might be valuable, given the objective you want to achieve,” says Peters, who has facilitated almost 400 CABs for financial advisors and other professionals over the past five years.

Peters recommends creating a CAB of 12, possibly including a centre of influence, a prospect — a small business owner, for example, if that’s a market you would like to tap — and also a problem client.

“If you can get [a disgruntled client] to participate fully,” he says, “he or she can give you incredibly valuable feedback.”

However, there’s no single formula for success. Kaplin selects a cross-section of his best clients for his CAB, replacing two or three members each year.

“We aim to have some younger, some older, some men and some women,” he says, noting all CAB members have been with the firm for at least five years. “Membership is meant to be a compliment — and we position it that way.”

Kaplin is especially careful to choose clients who will speak up. “They’re not the most outspoken clients, necessarily,” he says, “but they aren’t shy to talk. [And] we don’t want yes-men.”

@page_break@And in much the same way as you would put together a successful dinner party, Sampson notes, personality types come into play.

“You need to consider the people you’re putting together,” she says.

Kaplin can vouch for that advice: “We try to create some interesting dynamics, and as a result, the conversation usually flows.”

The experience has proven so enjoyable, in fact, that Kaplin has had other clients ask how they can join his CAB.

> Tell Them Why They’re There. The initial CAB meeting, typically held over the course of three or four hours on a weeknight over dinner at a restaurant or country club, should function as an orientation session of sorts.

“You should give a road map of your firm, where you want to go and the type of feedback you want to receive,” says Peters. “You want to get clients to buy into the culture of sitting on the board and also have them help you drive the agenda.”

From there, an agenda is a critical component of every meeting — whether it’s held annually (which Kaplin finds optimal), semi-annually (often the case among other Assante advisors) or quarterly (as Peters recommends).

“This isn’t a general, feel-good session,” says Littlechild. “It has to have clear goals and address issues on which clients can have some input and make a difference.”

Peters often distributes agendas to CAB members in advance of the meeting and typically lists three or more objectives per session.

“If you’re covering a really high-level strategic topic, it might take up the entire night,” he says. “But most of the time, we get through two or three topics.”

That’s also been the case for Kaplin. “We usually put out three broad topics each year,” he says. “We tell clients ahead of time what we’ll be talking about.”

But as with even the best-laid plans, conversation will occasionally veer off topic.

“It’s not 100% business talk all of the time,” Kaplin says. “Typically, the meeting will go off on all sorts of tangents, some of value and some not. If it’s not ancillary to anything, we’ll eventually shift back to the agenda.”

Although Kaplin is comfortable running CAB meetings (he often leads the conversation while Hampson takes the notes), Peters — given the nature of his business — recommends hiring a third-party facilitator.

“When advisors ask me why they should hire me to run their board meetings, I ask them why I should hire an advisor to manage my money,” he jokes. “I know how to keep the agenda rolling.”

> Act On What Your Cab Tells You. Regardless of who is running the meeting, CAB members must feel as if they’re serving a purpose and contributing to improvements from which they will ultimately benefit.

“You need to demonstrate that you’ve implemented changes as a result of the board’s feedback,” says Bob Dorrell, senior vice president of business development for Assante Wealth in Toronto, “so CAB members don’t think it’s just lip service.”

In the case of Kaplin’s introduction process, he went back to the drawing board, revisiting his coach armed with the CAB’s feedback.

“We adjusted our process completely,” Kaplin says, “to be more reflective of the people with whom we were already dealing.”

Kaplin maintains that he never would have gotten this quality of feedback from a written client survey.

“We do a broad-based client survey every two or three years,” he says. “But people just answer the questions; they don’t tell you what to do.”

But Kaplin does admit that his CAB’s advice isn’t always easy to hear.

“You have to be ready for criticism,” he says. “And, most important, be ready to change.”

Of course, listening has its rewards. Aside from fine-tuning countless aspects of Kaplin’s practice, his CAB has also indirectly encouraged referrals.

“Members of the board know much more about what we do and about our ethics and integrity and honesty,” he says. “As a result, they’re more comfortable in referring us.”

Although Dorrell stresses that a CAB should never be created with the sole intention of getting referrals, Peters takes a more aggressive stance: “I had one advisory board that designed an event and promised to invite target prospects if the advisor agreed not to hard-sell them while they were there.”

At the very least, he says, the fact that an advisor has a CAB should speak volumes to its members.

“Your referrals should go up,” he adds, “just by the fact that you’ve invited them.” IE