Continuing revelations about the way some clients have been treated by a small number of bank-owned financial planners show a dark side, not only of the financial services industry, but the way professional services firms can sometimes treat clients.
I’m not saying that most professional firms set out to defraud clients, or that all financial planners aim to do so. I believe the opposite is mostly true and that the majority of service providers believe they act professionally towards their clients.
However, I also think that many do not look upon client relations in the right way – they see clients simply as a means of income rather than people they want to help by contributing to their success.
As APRA said recently about bank financial planning arms, a change of culture within a firm is needed if they are to develop better client relations.
The infamous Goldman Sachs description of its clients as “muppets” is an extreme, if depressing, example of how the culture of some firms can become distorted.
For professional firms of any sort to have a reputation for looking at clients simply as a way to earn money while giving as little as possible – or even nothing – in return, is very disappointing – and counter-productive to any serious business development program.
How can simply treating clients as cash cows work in the long term?
Client relationships have to be a partnership, with clients seeing the service provider as someone who will add value. This needs trust.
Every financial planning practice, indeed every professional service firm, should have some sort of program that reinforces and adds to existing client relationships, including helpful and interesting communications. From this, wider business development programs can be built. Such programs don’t have to be complex, expensive, or time-consuming, but any business hoping to grow needs some sort of communication plan with its clients that is reviewed at least annually.
Activities such as providing timely information (and not only when requested), seminars, social media contact, can all add value to a professional relationship with clients.
This is fundamental to a firm’s future. After all, the only two ways to achieve growth is either to add new clients or to increase income from existing clients, but only when it is in their interest. Good relationships with existing clients will help bring new clients to a firm.
Word of mouth recommendation is still the best way of gaining new clients and satisfied existing clients underpin this.
Undertaking ad hoc promotional activities and then waiting for people to walk through the door won’t work. Approaches that achieve constant and consistent exposure, contact and communication to build relationships and create ongoing awareness, are the ones that work.
A basic communication and relationship building plan is not really difficult to develop. It starts with deciding where your market is; how you want to be seen; and what it is you want to communicate.
From this, activities that help reach the defined audience with consistent messages that show, explicitly or implicitly, the professionalism clients and prospects expect and deserve, can be developed.
Next time, we’ll look at the broader benefits of adding value to client relationships.