Need referrals? Don't ignore this vital stage of the client journey

Two client stages you may not be taking advantage of

To determine what makes an extraordinary client experience, we spoke to more than 1,000 investors, across a range of income brackets, who work with financial advisors and contribute to financial decisions in their household.

We discovered that many RIAs spend a significant amount of time on the first few stages of their clients' journeys, but don't pay as much attention to the last two.

Most of the clients we surveyed agreed with statements like, “I was made to feel welcome when I first reached out to make contact" (79%), and, “The process of getting set up/transitioning my account with him or her was seamless" (67%).

Far fewer clients agreed with the statements, “My advisor finds ways to thank me for being a client"(50%), and, “My advisor provides meaningful educational opportunities" (32%).

Although those might not seem like major issues — after all, you're still getting your clients' returns — the study found that ignoring these stages can lead to a lack of referrals.

Here's what we mean:

Source: The Four Principles of an Extraordinary Client Experience

How to increase referrals and client engagement

As you can see, boosting client engagement and referrals requires ongoing management and education.

As Julie Littlechild, the founder of Absolute Engagement and the author of the client experience white paper, explains, “The traditional approach to designing a client experience supports efficiency, but it doesn't necessarily entertain the notion of deeper engagement and referrals."

That's why Littlechild encourages RIAs to, "shift from very investment-focused communications and events," to addressing, “things clients really care about," like supporting aging parents or paying for their children's college education.

Here are three ways to put that advice into action:

1. Improve educational opportunities

Once you've determined your clients' concerns (through conversations and surveys), you can tailor your educational offerings to them.

As an example, Littlechild suggests holding a workshop for clients who are transitioning to retirement, during which you cover a wide range of topics, including money, of course, but also health, family, and legacy.

Continue to provide clients with accessible, engaging, and non-threatening ways to learn more. These opportunities can be simple and informal. “Nobody says, 'Hey you should check out my advisor's workflow or CRM,'" explains Littlechild. “And nobody shares economic updates." But a compelling event or article? That's another story.

2. Hold value-packed review meetings

Littlechild found that when it comes to client engagement, the quality of review meetings mattered far more than quantity.

Before your next review, she recommends sending your client a short poll that asks them to rate their level of concern on relevant topics, such as the following:

For illustrative purposes only

By doing that, she says, “You're starting to co-create the review conversation based on what the client cares about." Though you'll analyze performance, too, this strategy spurs clients to address top-of-mind concerns that could impact their financial plan.

3. Share your active appreciation

While thanking clients is nice, Littlechild calls it, “passive appreciation." She encourages “active appreciation," which is helping clients become the people they want to be.

Her go to example is a financial advisor who works with retiring clients who hosts workshops during which speakers discuss health and vitality in later life. “That appreciation event helps people reach a goal," she explains. “Clients will refer friends to that far more than they would to, perhaps, a market update."

Overall, Littlechild says, “referrals are about helping your clients understand how you impact other people like them." To increase client engagement, she suggests creating communications that are active, aspirational, and community building.

“It's about more than the money," she says. “It's about the big picture. It's about getting out of our own heads, which tend to be in investments and planning, and really thinking about what our clients are doing and feeling."

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other's policies or services.