Editor’s note: Debra Taylor will host the virtual workshop Savvy Tax Planning School for Financial Advisors, with sessions beginning January 23. Learn more here.
In today’s fiercely competitive wealth management landscape, meeting or exceeding client expectations isn’t just desirable—it’s imperative for business success. However, there are clear gaps between client expectations and needs, and the services advisors provide.
Addressing these gaps presents unique opportunities for differentiation and growth. CEG published a study entitled “Play to Win,” that analyzes where the gaps between clients and advisors exist and how to close them.
Below, we summarize the main gaps that advisors face and five strategic methodologies to bridge them, ultimately fostering organic growth and enhanced client satisfaction.
Identifying the gaps
There are significant gaps between the services provided by advisors and what investors perceive they’re receiving. This is particularly felt in areas such as tax planning, estate planning, wealth protection and charitable planning. Affluent clients prioritize stability, growth, and legacy-building, valuing investment management strategies and insightful market analysis.
However, many clients are unaware of the breadth of services advisors provide, leading to underutilization of available resources.
In fact, the study found that less than a quarter of investors feel they are receiving estate planning (22.4%), wealth transfer (16.8%), or estate settlement advice (11.1%). This directly contradicts the more than three-quarters of advisors who feel they are providing these services to their clients.
Clearly, there is a misalignment between the services that advisors prioritize and those valued most by investors. Advisors may overestimate the importance of certain services like loan management or real estate advice.
The CEG study found that investors most valued their advisors’ investment management services, followed by financial planning, tax-planning, estate-planning and estate-settlement services. Advisors must reevaluate service offerings and communication strategies to better meet client needs.
How do you bridge those gaps?
1. Connect with multichannel communication
Improving communication through tools like social media, webinars and newsletters, will ensure broad and robust communication with current and prospective clients. It is important to communicate with transparency–clearly articulating fees, services, and investment strategies–to help build up trust and align with client expectations.
Communicating with transparency in the modern era goes beyond speaking clearly, it means being transparent in your online presence and on your website. Our website clearly lists our fees and services, so that prospects receive transparency before they even speak with us.
For clients, we provide constant communication through weekly newsletters that detail market events and information they should be aware of. Clients also have access to an online portal that allows them to access reports with their real-time account information and performance data.
Pro tip: Keep your website updated with fee and service information for prospects. Consider using client portals to give clients real-time access to account information. Additionally, creating helpful educational content will demonstrate expertise and help clients understand the value of financial services, fostering trust and engagement.
2. Personalize and segment client services
Advisors should aim to tailor advice based on individual financial situations and goals to meet diverse client needs. Performing a deep discovery and comprehensive profiling process for each client will help you do just that.
In fact, CEG’s study found that only 21.5% of advisors look at all financial and related aspects of clients’ lives when profiling clients and only 22.3% deal with aspects beyond financial issues. By performing deep discovery and asking more personal questions, you can anticipate your clients’ needs and greatly enhance client satisfaction and loyalty.
Additionally, asking for client feedback is a great avenue to understand your client’s expectations and needs. Although asking for client feedback can be daunting, it is the most important tool in your toolbox to discover how your firm can improve.
We host twice-yearly Client Advisory Review Boards in which we invite all our clients to provide us with constructive criticism. We also request feedback after every client meeting through multi-question surveys. By requesting feedback, we are able to improve in areas where we didn’t even know there was necessarily an issue.
Pro tip: While advisors are generally in tune with client concerns, the reality is that you shouldn’t just assume you’re on the same page. Some strategies to stay aligned are performing client surveys to gauge client sentiment, staying up-to-date and aware of client’s professional and personal situations, and regularly performing self-assessments to discover areas for improvement.
3. Differentiate beyond financial planning
Differentiation can provide a competitive edge, resilience against industry pressures, and help improve client experience. Even though you may believe that you differentiate in the marketplace with your current services, the CEG study shows that most advisors don’t differentiate nearly enough.
The most common differentiators used by advisors include financial planning services (58% of advisors), level of customer service (55%), comprehensive services (54%), and years of experience (51%). Clearly, financial planning is not the differentiator that you may believe it is.
Pro tip: Consider implementing services like wealth-protection planning, advanced planning, trust and estate planning, long-term planning, family financial education and charitable planning to differentiate your firm.
4. Understand how to maximize technology
The CEG study shows that over half of the industry’s advisors have started implementing AI in some capacity. Advisors should leverage AI not only for market analysis but also for automating tasks and personalizing client communication.
However, while AI offers numerous advantages, it’s crucial to remember that AI applications must comply with data protection laws, ethical guidelines and industry standards.
We also use many different technologies to help us more effectively and efficiently provide varied services. Specifically, we use Holistiplan to provide tax analysis, eMoney to provide planning, YCharts and Clearnomics to provide investment analysis, and many more!
Pro tip: Test out AI (whether that is ChatGPT or Claude) to see how it can help your firm work faster and more efficiently! Also, you should have a whole suite of technologies that you use for tax analysis, planning and investment analysis work.
5. Referrals are key
Understanding the impact of client-generated referrals on yearly business metrics is pivotal for advisor businesses. In fact, clients are identified as the most significant source of referrals, accounting for about 36% of all referrals received by advisors.
The study shows that after client referrals, accountants (11% of all referrals), friends and family (9%) and investment bankers (8%) are the next largest sources for referrals.
Pro tip: An emphasis on service and client experience should be a top priority for business growth. Consider implementing strategies to measure client satisfaction like client retention, conducting client surveys, discussing satisfaction in client meetings, and rate of client referral.
In today’s dynamic landscape, sustained success hinges on understanding and meeting client needs. Advisors who excel at uncovering and understanding investor concerns will be able to more effectively serve those customers, driving organic growth for their firms.
Adapting strategies according to evolving client expectations ensures continued relevance and success in the financial services industry.