As we enter a new year, we have the chance to step back and take a hard look at the ways in which we run our businesses. And high on the list of things to examine is how you structure client communication.

In the past, one of the key reasons that clients worked with a financial advisor was to gain access to basic information. Just by providing that information, you were adding value. As a result, the general view was that you could send all clients the same information, taking a “one size fits all” approach.

Today, we’re moving toward a “one size fits none” world. To be effective, you’ll have to tailor your communications to client preferences. That means sending clients information that’s relevant to them, and at the frequency they want and in the form they want.

In the process, you also need to let your clients know that the reason they’re getting particular information from you is that it relates to their specific needs.



> Communication In The Past

This is a big departure from the recent past, when clients were starving for information and happy with almost anything you sent them.

In 1990, one investment firm helped rookie brokers by generating leads. Two weeks before the end of the rookie-training program, the firm would drop 200 letters into high-income areas in each rookie’s home market. The letters offered a free research report on opportunities in bonds upon the return of a postage-prepaid card. This would give the rookies some leads to follow up on when they started their practices. From those 200 letters, typically 30 to 50 replies were received — a response rate of 15%-25%. Today, you’d have to send 50 or 100 times as many letters to get the same response rate.

Another example: in the late 1990s, there were investment shows during the weekends for which thousands of investors lined up to get basic information, hoping to get questions answered by reps from fund companies and investment firms. Or you had people thronging to investment seminars that often really were poorly disguised sales pitches; again, attendees were starved for information.

In this environment, advisors won points just for providing general, basic information.



> Communication Today

The world has obviously changed dramatically. Clients are much more knowledgeable. The Internet has opened up access to information in a way that wasn’t conceivable not that long ago. Finally, competition has kicked in, mostly in the form of the Internet. Clients can go on the website of any discount brokerage and receive the basic information they want.

This has profound implications for advisors. For more and more clients, providing high-level generic information is no longer seen as being a source of value.

Yes, tailoring communication to individual clients is much harder than blasting out the same newsletter to all clients every quarter. But in the new world that advisors now work in, what matters is not whether something is sent; what matters is whether it is read and whether it communicates effectively.

Clients want to know that the information they are receiving is tailored to their needs.



> Tailored Communication

Here’s an example of tailored communication: suppose you have a client who owns a business that exports into the U.S. Or perhaps your client is a retiree who owns a condominium in Florida or Arizona. Both of these clients would be interested in the outlook for the U.S. dollar and the U.S. economy.@page_break@If you send both of them a generic article with a market forecast, even if they do look at it, chances are that they won’t see it as providing much value. But if you send them something specifically on the outlook for the US$ or the U.S. economy, they’re much more likely to look at it and see it as providing value — especially if there’s a handwritten note on the report that reads: “In light of our conversation, I thought you’d be interested in this.”

To be clear: it’s not just sending clients information that’s tailored to them; it’s ensuring that they know you’ve selected that information especially for them.



> Making This Happen

If you have 20 clients, it’s not difficult to do this. But it takes focus and ordering priorities to set aside the time on a regular basis to find the right information and send it out. If you have 100 or 200 clients, it’s much harder — unless, of course, you’re organized to do this efficiently.

Start by looking for common areas of interest in your client base. If you have lots of snowbirds, they’re going to be interested in the U.S. dollar and the tax and accounting implications of owning U.S. real estate, changes in the rules for seniors’ benefits — anything relating to their specific situation.

Meanwhile, if you have families with young kids, their hot buttons are going to be different — related more to education and planning for retirement.

Note that there often will be interest in more general information as well. The key is how you position that information. Suppose you say to a client: “Here are six areas of information in which I’m going to be concentrating on sending material to clients in the next while.” These might include tax-savings strategies, the outlook for the economy, forecasts for interest rates and money manager interviews on the stock market. All these topics are pretty general, but they’re still areas of interest for many clients.

The key is being able to say, when you send that information: “Based on our conversation, here’s information on interest rates that you expressed interest in.”

It might be exactly the same information you’re sending now, but presented in a different form. You are not sending it to everyone; only to those who asked for it.

> The Devil Is In The Details

This process sounds simple on the surface. But as the expression goes: “The devil is in the details.”

Suppose you’ve decided to focus on six areas of potential interest. For each important client, go through the topic list with them and identify which ones they’d be interested in. You’ll end up with a list of interested clients for each topic area.

Next, you need to establish each of those six topic areas as a separate list in your database. Then, once a month, you and your team have to look for a report or article you can send to clients on one, perhaps two, of those lists, remembering to position each item as something you’re sending because these clients asked for it.

As I said at the top, this is much more work than blasting out a newsletter to all your clients. Remember, though: generic communication just won’t cut it today. Sending everyone generic information simply won’t work. You’re far better off doing something hard — and seeing results — than going the route of least resistance and wasting time and money. IE



Dan Richards is CEO of Clientinsights (www.clientinsights.ca) in Toronto. For other columns by this sales expert, visit
www.investmentexecutive.com.