The power of proactive communication to reassure clients 

It’s a risky approach. There is overwhelming evidence that when clients experience a lack of communication from their advisor, especially when they’re feeling nervous and uncertain, they begin to lose trust in the relationship. They may even start looking for a new advisor and ultimately take their business elsewhere.  

From a client’s perspective, now is not the time for radio silence. They don’t know what to make of the fact that their advisor is not reaching out. They may even wonder if their portfolio is in trouble.  

This is in fact a wonderful opportunity for an advisor to demonstrate their value. You don’t have to offer a crystal ball (which none of us has anyway). Instead, the messaging should be reassuring, should focus on how the client’s plan took this type of situation into account (hopefully) and should invite clients to reach out if they wish to discuss their portfolio.  

An advisor can even assess if some clients actually have a different risk appetite than they thought, and perhaps consider appropriate changes to their portfolio in the future.  

One challenge we have yet to solve as an industry is how we can meet client expectations for increasingly personalized communications. Clients receive hyper-personalized messages in many other aspects of their lives — and they have come to expect it more broadly.  

In addition to communicating proactively, we should consider the content of communications — how much or how little, high level or deep dive and so on. 

Suggestions for advisors  

Many advisors segment their client base according to portfolio size and demographic categories. There’s more to the story though. Consider behaviour-based segments: 

• Communication preferences. How often do clients want to hear from you, in what manner (email, voice, blast newsletter or approved social media) and how much detail? Some clients want more communication. Some want less. 

• Their reaction to market volatility. I’m not suggesting we rely on a client’s official KYC profile. In the absence of other information, that can be a helpful starting point but it may not tell the real story. Instead, use times like these to determine how clients behave when markets roil. It’s important to understand when a client gets nervous — so that an advisor may reach out and help put their mind at ease.  

• The subject matter they want to hear about. Historically, investment firms and advisors communicated solely or primarily about investing: advisor perspectives on market movements, detailed explanations of portfolio returns (or lack thereof), perhaps even a few case studies on specific investments. But not all clients want a detailed analysis of their portfolio or the markets.  

It’s not difficult to imagine that a family preparing for their first child may want more information about tax credits available to them. A client saving to buy their first house may want to understand the First Home Savings Account and how other savings tools can be used for their home purchase. A client preparing for retirement may want to hear about how to use different sources of retirement income in a tax-efficient manner. Most advisors have this information at their fingertips, and it should be relatively easy to package those insights and information for the right audience. 

Effective communication isn’t just about saying more — it’s about giving clients information they want at the time they need it.  

Then, advisors should be sure to leverage all marketing automation tools available at their firms to easily deliver their messages.  

In terms of how to identify different client segments, here are a few ideas: 

• Develop a short survey and ask clients to respond to it. If possible, leverage behavioural insights tools that some firms already have available.  

• Ask clients how often they’d like to be contacted. It is amazing how the simple act of asking and listening goes a long way with clients. It will help you determine how often they would like to receive communications from you.  

• Ask clients what they want to hear from you about. Do they want market information and insights? If they do, ask how much detail they would like. As we all know, clients’ financial literacy varies considerably, and so does their interest in the intricacies of financial market movements. In addition, are there other subjects they would like to hear from you about? 

Taking these steps would represent significant progress towards personalization and meeting client expectations. 

A suggestion for firms 

Especially as do-it-yourself investing tools continue to grow more sophisticated, support your advisors in delivering and demonstrating value to clients. Don’t let your advisor practice-support tools and technology be focused solely on investment analysis, at the expense of client communication.  

Client communication tools and supports are at the front end of the client relationship — they are essential to attracting and engaging clients. They are also the first line of defence against clients leaving their advisors. They deserve investment and focus.  

For both advisors and firms: Do not underestimate the power of client communication. It is the basis for most client relationships. More importantly, a lack of communication is a critical factor in the deterioration of client relationships.  

Susan Silma is a lawyer and former regulator with a deep understanding of the client perspective. She is passionate about simplifying and humanizing the client experience in financial services, while navigating the complex regulatory environment and promoting compliance.