Thank you, Millennials, for this one—it’s all about the “experience,” and that includes how your clients interact with you and your 401k business.
“To remain competitive, advisors must develop a strategy to reliably deliver an exceptional client experience,” Cerulli Associates finds in new research.
It then launches into a list of next-gen descriptors advisors must educate themselves about, including:
- creative client segmentation,
- intergenerational engagement,
- client recognition and appreciation, and
- the development of a “holistic client perspective.”
Creative client segmentation
Creative client segmentation methods are coming into play at many successful advisory practices, primarily through technology.
“Nearly 60% of experience-centric practices use technology to automate client interactions, which includes building client personas, helping advisors draw a direct connection between the client’s perspective and the approach they prefer,” Marina Shtyrkov, research analyst at Cerulli, said in a statement. “By segmenting their client base into client personas, advisors can automate workflows and optimize engagement opportunities.”
Intergenerational engagement
Advisors are also seeking new opportunities to engage younger investors—including clients’ children and heirs—given their aging client bases.
In response, many broker/dealers already encourage their advisor forces to form teams and integrate next-generation advisors into their practices.
“Clients who work with integrated, effective multi-advisor teams appreciate feeling like they have an entire team of specialists at their disposal,” Shtyrkov adds. “This type of intergenerational engagement can help stem attrition when a client passes away and the beneficiary chooses a different advisor.”
Client recognition/appreciation
Cerulli finds that relationship nurturing can also enrich the client experience.
“Experience-centric advisors, in particular, recognize that client relationships form the backbone of their business and nurturing them requires dedicated acts of appreciation, which can be delivered in various manners,” Shtyrkov explains.
While many advisors host client appreciation events, experience-centric practices focus on the kind, unexpected gestures that engender joy, trust, and loyalty.
Round-the-clock availability is not always feasible, but extended access—especially in case of crisis or emergency—creates a sense of on-demand support. Recognition of clients’ key life events, transitions, and milestones can also add a profoundly meaningful touch.
Holistic perspective
The adoption of comprehensive financial planning continues to grow among advisors.
On average, advisors expect to expand comprehensive financial planning services to more than half (55%) of their clients by 2020, increasing from only one-third of their client base in 2013.
“However, as the adoption of holistic planning grows, strategic partners should consider how their planning tools can be adapted to varying levels of ability, interest, and need among advisors,” Shtyrkov concludes. “Modularized or ‘light’ planning tools make it easier for advisors to incorporate financial planning into conversations with more clients.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
