When RIAs Embrace True Wealth Management, Their Clients Stay For Life

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At The Shattuck Group, Randy empowers midsize service firms to break through to their next level.

I’ve said for years that RIA should actually read “rIa” — with the capital I in the middle representing independence. In a previous article, I’ve described why independence is so important to differentiation within the financial services industry. But there is a downside to independence best described by another word that begins with “I” — inconsistency.

Since RIAs are independent, they get to define their approach to practice management. This can lead to inconsistencies between the way financial advisors at the same firm operate. Advisor A can promise and deliver a very different client experience from Advisor B. From a branding perspective, it is nearly impossible to promise the market a certain type of client experience unless you have clearly defined it and put processes in place to deliver it —consistently. 

Here is a lesson I’ve learned over the last 20 years: The client experience determines client loyalty. When you promise a certain type of experience that is deeply desirable to clients and then deliver it, they have no reason to leave — ever (even in a market downturn). But if you make the wrong promise or don’t deliver on your promise, their loyalty will always be in question.

I believe RIAs are in the best position to deliver a promise that is very meaningful to clients: true wealth management. To me this means three things:

1. You deploy a thorough discovery process that uncovers all client concerns. 

2. You create a plan to address every concern.

3. You deploy the plan on behalf of clients, asking them to do the things that only they can do while you and your team do everything else.

True wealth management provides solutions to everything that concerns clients: investments, taxes, estate plans, insurance protections, real estate, college funding, retirement and charitable giving, to name a few areas. After ruminating on this definition for a while, I’ve come to identify four disciplines that are essential to delivering true wealth management:

1. A systematic and repeatable means of getting to know clients deeply.

2. A comprehensive plan to address everything that impacts a client’s wealth.

3. A long-term perspective.

4. A commitment to leading the professional advisor team.

My sense is that if you deliver a great client experience across these disciplines, you’ll keep most clients for life. Let’s take a look at these.

Systematic, Repeatable, Comprehensive Discovery

Discovery is the process of getting to know clients deeply so you can serve them well. To me, there are three important elements of discovery. It should be:

1. Systematic, so you touch on every area that concerns clients.

2. Repeatable, so every client receives a stellar experience.

3. Comprehensive, so you don’t miss important details that matter to clients.

One of the only ways I’ve seen to do this effectively is to have a scripted set of questions that address the core areas known to be of concern to clients. A best practice is to gather your brightest minds and ask them about the questions they use in discovery. Out of this, you can create a questionnaire guide for your entire firm to use.

A Comprehensive Plan

Most financial advisors seem to focus on investment returns with their clients. While this area is important, it is an incomplete picture. For instance, if a client sees returns that total even as much as ten million dollars but they don’t have a plan to protect that wealth, it could be lost to unjust seizure through legal action.

In other words, all of your hard work over many years to grow a client’s investments could be for naught simply because they lack the proper insurance protection. I believe that what clients really want is a partner who can help them manage all of the details of their financial life and align those details with their wishes. In most instances, the more wealth someone has, the more complexity there is in their financial life. A comprehensive plan is the most effective solution I’ve seen to tame complexity.

A Long-Term Perspective

If you want clients to stay for life, you have to take a long-term view of the relationship. The best way I’ve seen to foster this type of relationship is to:

1. Develop a long-term financial plan.

2. Guide clients over time and hold them accountable to live out the plan.

Long-term plans require long-term commitment from clients, and this can be very challenging to secure. We are all subject to the greed/fear paradox that seems to drive so much financial decision-making. But a great financial advisor finds ways to hold clients accountable to act in their own best interest by sticking to a plan over time.

A Commitment To Lead The Advisor Team

Most successful people rely upon multiple professional advisors: CPA, estate attorney, insurance specialists and one or more financial advisors. But do these professionals coordinate their counsel? More often than not, the answer is no. This is where RIAs have a real competitive advantage. Why? Because you can bill directly for these services.

You can (and I believe should) become the leader of these advisors to create a true team. This is where you can produce a client experience that is so compelling and so customized to their needs that it would be nearly impossible for them to get it elsewhere. Why should you do this?

• Leading the advisor team allows you to take tasks off your client’s plate, giving them more worry-free time. How much is that worth?

• Your discovery efforts probably give you intimate knowledge of the client that other advisors don’t have. This allows you to be a better advocate for your client by guiding the professional advisor team toward outcomes that matter to your client. This saves your client a lot of time and hassle.

• When you know and can easily call upon other professional advisors, you can be much more effective in ensuring that critical tasks that impact a client get completed on time and in full measure.

These four disciplines create rock-solid client loyalty.


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