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Practice Management

Advisors who take advantage of the technology to manage their practices have an edge over those who don't. 

This Practice Management article is intended for financial advisors only (registered representatives of broker dealers or associated persons of Registered Investment Advisors).

It doesn't matter how many times Mark Eskin has emailed you or how little he has to tell you; if you're his client, he's going to call you. On the phone. On a regular basis. Until he gets you on the line. And if he doesn't, he'll be in trouble—with his computer.

Eskin, executive vice president of wealth management for Stedmark Partners at Janney Montgomery Scott in Philadelphia, has his client outreach schedule highly automated through his CRM system, down to setting a "no contact" interval for each client based on factors including portfolio size and complexity, plus how often they like to hear from him and his team. "Any good advisor has a gut sense for which clients like to be contacted more frequently and which clients don't," he says.

While it rarely happens, if he hits that interval—typically 30 days to 120 days—an alert goes off to remind him to reach out. But for Eskin and his eight colleagues, reaching out takes a very specific form—a two-way interaction. "The only thing that resets the 'no-contact' interval is a live phone conversation or meeting," Eskin says. His team's nearly $1 billion practice has grown about 20% per year in recent years.

Not every advisor is as precise as Eskin, but exactly how and when to contact clients is a question that no advisor can afford to ignore. The basic idea is simple—more client contact leads to happier clients and more referrals—but executing it can be complex. That truth is magnified as the range of communication options proliferates.

"The biggest pitfall is assuming you can treat all of your clients the same," says Kelly Hoffman, director of advisor marketing and communications for Janney. Does a client want every newsletter your firm produces? If so, is that in digital or print form? Do they expect to hear from you on LinkedIn? How do they feel about snail mail?

"Knowing your audience is something that not all advisors do as well as they can, given the technology available to them," says Kim Sharan, chief marketing officer for Ameriprise Financial. Taking the more-is-better approach may only make things worse. "It's great to send stuff, but if you don't tie it into a conversation, the client will think it's not important," she says.

From the Gut...and the Heart
Surprisingly, learning about one's audience is still a fairly low-tech endeavor. Many echo Eskin's idea that it starts with a gut feel; few are using surveys or other scientific methods. Client communication preferences "are part of the conversation with a new client," says Sherry Paul, a wealth advisor for Sherry Paul Partners with UBS Wealth Management Americas in New York. "I ask things like. 'If we have an article we think you'll benefit from reading, do you mind if we pass it on?' and 'Do you prefer to get them electronically or in hard copy?'" She also makes sure to check in periodically, noting that clients' preferences change. "If you're a CEO, you don't want to get one email. If you're retired, though, you're a different client."

The optimal number of client touches in a given year is a topic of hot debate. Sharan says that Ameriprise's research suggests 80 is about right, with that figure including 12 statements, 12 newsletters, four or five phone calls, and a few greeting cards, at a minimum. "It adds up quickly," she says. UBS doesn't offer a comprehensive number, but counsels that "a good rule of thumb is to be communicating on a monthly basis, whether by email, on the phone or in person," says Kraleigh Woodford, head of wealth management marketing and communications. Janney's Hoffman says the firm "absolutely does not" have any sort of target figure and instead leaves it up to advisors to discern what's appropriate.

Rather than simply trying to multiply touch points, advisors who have robust client communications strategies parse them into categories. There are the traditional portfolio reviews, which are ideally done in person. There are the "boring" details—the status of client tax forms, the need for checks, address changes—that can become touches if viewed through the right lens. There is news about current market conditions, often in the form of a compliance-blessed article, but which also can take the form of phone calls during choppy periods to see if clients have any questions. There are the congratulatory notes for a birthday, new job, wedding or new baby. And then, increasingly, there are the quasi-counseling sessions that can emerge from an article on a broader topic, such as how to help adult children financially, what developments are occurring in philanthropy and whether to buy long-term care insurance.

"A lot of the material and the conversations are more around parenting and psychology than investments," Paul says. The discussion about long-term care in particular is a charged one, touching on how clients feel about aging and what they are expecting from both children and parents. "Helping coach them to the right conclusion can be very powerful," she notes.

Talking the Talk
Frequency and topics may vary from client to client, but the best method of communication may be more clear-cut. Eskin says he emails regularly with clients about their accounts and sends occasional articles or hard-copy letters. But as his CRM set-up reveals, nothing trumps a live conversation. It's not always long, and it's not always newsy, but he always asks if there's anything else his firm can do for the client.

"You'd be amazed at what comes up—people remember they have another account they've been meaning to roll over to you, they have a brother-in-law going through a nasty divorce who needs a new financial advisor or their firm is starting a 401(k) and needs help," he says, recounting the various ways referrals come through a simple question. "If I asked that question in an email, though, a client would be more likely to ignore it as a simple pleasantry."

Indeed, "the phone call is still the most valuable," says Derek Vest, senior vice president of financial advisor marketing with Wells Fargo Advisors. "But today, it's in flux how much people want to talk on the phone compared to other channels." Busy clients may prefer a quick email to a phone call on some matters; younger clients might be happy to text back and forth on an important matter if compliance allows it. Going digital in some ways makes it easier to touch clients—you can pump out a constant stream of information quickly and with little cost—but the challenge is that communication through those other channels still has to seem personal. Many firms are creating digital libraries of articles and newsletters that advisors can send out to clients, for example, but using them wisely requires a delicate touch.

At Wells Fargo, advisors can customize newsletter content by client interests, says Vest, and even track which articles clients click on in some cases. UBS offers a corporate publication called Washington Weekly that rounds up all of the current activity on Capitol Hill each week, often with a teleconference Q&A that clients can join. Paul draws regularly from that, but selectively. "I don't send it out weekly, and I don't send out a blast to everyone; I send it individually to clients based on the topics that are relevant to them personally or to their business," she says. "No one wants to feel like part of a cattle call."

Social Experiments
One channel that advisors will have to grapple with in the near future is social media. Few currently use it with any regularity for business, and some say they don't want to. "We have our toe dipped in social media, out of necessity, but to us it's not the way to keep relationships strong over time," Eskin says. Yet firms are jumping on the bandwagon, trying out various ways for advisors to use the tools for marketing without violating compliance rules.

At Janney, about one-third of advisors and branch managers have signed up for corporate, compliance-tracked accounts on Facebook, Twitter or LinkedIn since they became available last year, says Hoffman, and she is trying to convince more of its importance. "Your clients may not be ready for this, but chances are their children and grandchildren are very much going to want to be communicated with that way, so you need to start experimenting."

Another digital twist that some advisors are trying out is the virtual meeting. "Webex meetings and Skype conversations haven't been used in the financial industry to the extent they are now, and we're also starting to see some seminars done online for larger groups," says Ameriprise's Sharan.

Even as communication evolves, though, some things don't change. Old-fashioned touches, such as a card or note in the mail, or flowers on a big birthday, can stand out even more in an era where almost everything is electronic. And the milestones don't have to be momentous. "I've sent pies for July 4, wishing people a happy summer," Paul says. "Who wouldn't like a pie?"


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