Our Client-Service Matrix Guides and Deepens Client Relationships

By Kate Marvel
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Horsesmouth Essential: What’s Working Now: This advisor segmented clients based on much more than assets, creating a service matrix that promotes better communication as well as efficiency.

Editor’s note: In this edition of What’s Working Now, an AdvisorRADIO feature in which Horsesmouth members tell us about recent success they have had running and growing their businesses, we hear from advisor Kate Marvel who created a client-service matrix model to provide better client service. You can hear the full interview by clicking the audio file below. The following article includes edited excerpts of Kate’s comments. Chris Holman, Horsesmouth’s Executive Coach, conducts What’s Working Now interviews.

Quick Overview

Advisor: Kate Marvel
Indianapolis, Ind.

Years in business: 26

Firm: Independent

What’s working now: Established a client-service matrix that included a client segmentation. This helped to analyze the return on the investment of time spent with each client, which in turn led to more streamlined organizational processes and better client service.

I have been an advisor in the Midwest for the past 26 years. I started as a commercial loan officer in a bank and eventually decided I wanted to do a better job of taking care of folks. So, I specialized in retirement planning and Social Security, working primarily with folks who are within five years of retirement. We have a practice that is relatively small because we want to keep it that way.

We enjoy very much working with folks who try to figure out how to stretch their hard-earned dollars.

Categorizing our services

My team and I went through an educational program offered by our broker-dealer. One of the first program exercises had us slice and dice our calendars, so we saw how we spent our time.

Next, the program asked us what we do. We sat down and came up with 78 different things that we do. Take financial counseling, for example: We work with clients going through divorce, young adults whose parents send them in, clients who need to understand how to fund college for their children, clients who need to understand estate planning for their parents, and more.

There were lots of different items in there. Once we had the list of 78 put together, we divided them into categories: financial planning, estate planning, customer service, and so forth.

From there, we created a matrix, and the matrix is normal—platinum, gold, silver, and bronze. We tried other names, but nothing else seemed to fit. We decided this format spoke to something our clients could understand. Our next question was “Within the matrix, who qualifies for what?” Clients right at retirement will want their entire retirement plan and cash flow analysis done, with applicable tax strategies and a review of Social Security. They will want to know how their cash flow would work in retirement.

In the past, if a client had a certain amount of money with us, he or she would qualify for that at no cost. If they had a little bit less, then they would pay a little bit more. If they didn’t have much money with us, then they would pay a lot more. But we looked at this model and said “That doesn’t work well for us.”

A thorough client segmentation

Instead, we went in and did a client segmentation that took into consideration a lot of other variables besides assets under management. These variables included likeability. We asked ourselves questions like these: How difficult is this client to work with? Do they return our calls to schedule a meeting? Do they send us copies of documents we need right away? Do they return documents when we need a signature? How much time and effort does this client take? That is, do I have to drive to see them, do they come to my office, do we need to meet extra times, do they need to meet outside of business hours?

We also look at the clients’ future potential and how profitable their accounts are. If we found somebody with an unprofitable account, then we would have a frank conversation with them about it.

We did a very detailed client segmentation and it broke out like a standard bell curve, just as we expected. Then we made a cost-benefit analysis. What were we making on our clients? Were we making money?

Our findings were very typical: our top two tiers make money and our bottom two tiers lose money—not a lot of cases but they still lose money for us. Yes, I’ve been doing some freebies along the way, which I think everyone should do. But I can’t do too many, otherwise I’ll be out of business.

How much to tell clients?

My team and I reviewed our client segmentation and our list of 78 services, and then developed a client-service matrix of who gets what. We sat down and talked. One of the questions that came up was “Do we show our clients what they get, or do we show them what everybody gets?”

This led to an interesting discussion among our staff because some people liked the idea of saying, “Chris, this is what you’re going to get. When you bring in X number of dollars, this is what you’ll pay for all the different services, or these are the services you’ll get based on the fee you already pay. Now, if you bring that account over from XYZ, you’re going to qualify for this instead…”

Or, “Chris, when we call you, it takes two to three phone calls to get you to schedule an appointment. If we could get you to call back and send in copies of your statements right away, then you might move up a service category.”

A two-way street

I like to discuss with my clients how we work because financial planning is a two-way street. It’s not just me telling someone what they have to do. It’s them figuring out what they want and need, and getting a plan that works for them. If our clients work with us and it’s a two-way street, it works a heck of a lot better. So, we decided on an open client-service matrix that has led to some of the greatest conversations with clients I’ve ever had.

Once I said to a client, “You have a habit of cancelling appointments at the last minute and rescheduling them. Let’s talk about how this impacts me. I’ve paid my staff to prepare for your meeting, then I’ve taken my time, and I don’t have anyone else at the last minute who I can fit into your slot. If we can work out a meeting time that you can keep, that would be a wonderful thing.”

I think clients often don’t understand how much time and effort we put into preparing for a meeting. They don’t see what’s behind the screen. They walk in and assume that advisors will just pull all the information up on our computers as we meet with them. It doesn’t work this way. We need to educate them, and our client-service matrix is an educational tool.

Our client-service matrix has given me the self-confidence to say to a client not too long ago, “You need to find somebody else to work with. We’ve talked and talked and talked about keeping appointments and returning phone calls, but I don’t think you respect the time we put into this.” This tool made it easier for me to have a tough conversation like that.

Making choices together

The matrix also gave me the ability to tell a client, “This is what a financial plan costs,” and that helps.

I just had a new client come in, and I said to him, “OK, if I charged you a fee on everything you have, you will fall into the gold category. If I don’t charge a fee on these particular assets that you paid a commission on five years ago, but I charge a fee on the other assets, you’re going to fall into the silver group. In that case, you’ll pay a separate fee for financial planning.”

We did the math and the client said, “I’m fine with paying a fee for the financial planning because I agree the assets I paid commission on are still decent.” So, I was able to give this client a choice between A or B. He made a good choice. It was so nice to have that conversation because it was more of a partnership between the client and me. One of my comments to him was, “Everything I have asked of you has gotten back to me quickly. I appreciate that so much.”

An open and honest relationship

The clients appreciate our honesty and openness with them. Our goal is to help our clients reach a successful retirement. But this destination point requires two-way collaboration, where we are on the same side of the table as the client. By communicating this with clients, it helps them get there.

The client-service matrix offers many benefits, but we also have some new challenges because of it. One of the biggest challenges is talking to folks we genuinely like, but who don’t understand the way things work. I have to explain to them what they’ve done wrong without making them feel like I’m shaking a finger in their face. I try to do it with a velvet fist, try to be nice without hurting their feelings.

To better acquaint our clients with our matrix system, we, at the firm, are in the process of developing a client kit. One of the items of the kit will be a page explaining what it takes to be a platinum client, gold client, silver client, and so on. This will complement our discussions with clients and give them something to refer to outside of our office.

My advice to other advisors

Do a client segmentation. You’ll find all kinds of research on Horsesmouth about how to do a client segmentation. Then, understand what you do for your clients. As you meet with clients, keep a list of everything you do. All of these things will help you create a matrix that’s right for you.

It’s not a quick process. It may take up to several months. You really need to do your homework to get it done correctly. It’s not the kind of thing where you tell your office manager, “I want to do a client-service matrix tomorrow.”

The time it takes to do it correctly depends on how you’ve done business in the past with your clients. If you’re more transaction- and commission-oriented or if you’re more fee-oriented, I think that changes the conversation too.

Let’s face it, there are an awful lot of advisors who use the financial plan as a loss leader. If you’re doing that, you’ve got to ask yourself, “Does my time have value? Do I want my clients to understand the value behind this financial plan?” People appreciate things that have value. If they think the financial plan is just a vehicle to sell something, the matrix isn’t going to work as well.

Advisors need to have an open, honest, and direct conversation with themselves about what they want their practice to look like before they can develop a client-service matrix that’s beneficial for them.


Great discussion. Is there any chance that I could get a copy of your matrix? cbayer@camtoledo.com
I really loved your article and can use your ideas in my practice. Please share your Matrix and service breakdown. Thanks !
Thank you very much for the discussion! Excellent. Ditto Janet's request. shawn@ffgnetwork.com would love a copy of mentioned matrix. Shawn
Great discussion. Is there any chance that I could get a copy of your matrix? Janet@JannetBarrcfs.com
Great article and also good talking points on how to introduce this to clients!

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