Advisers failing to communicate with clients

A new article from American Banker points out how Advisers are deficient in client communication. In the article they highlight findings from SEI, a provider of asset management, investment processing, and investment operations solutions for institutional and personal wealth management.

My summary is that advisers are failing to take advantage of key technology that will allow them to prospect more effectively, build stronger relationships with clients and tap into the referral sources waiting for them in their client base.

Their first finding is that “62% of financial advisers don’t communicate with their clients on a regular basis and acknowledge this flaw is their greatest failing when it comes to providing service to investors.” What I find shocking about this finding is the fact that communication has become exponentially simpler in the last 5-10 years. You can email, IM, text, send messages over social networks and more.

Also consider a finding by the Spectrem Group. “Nearly 40% of investors with net worth between $1 million and $5 million said they expect a call back from their adviser within two hours or else they would consider making a change and finding another financial professional to service their accounts.” Clearly the expectations of affluent investors are increasing. Part of this is being driven by the fact that so many new communication channels are focused on instant gratification. We live in a world where email is the new “snail mail”!

So what can you do as an adviser? First and foremost, you need to recognize the needs and expectations of your clients and prospects have changed. In addition, it is critical to understand the power of the social platforms, like LinkedIn, Facebook and Twitter. These platforms not only allow you to quickly and effectively grow your business network, but they also give you a constant two-way flow of information.

John Anderson, the head of practice management for SEI believes that “Frequent and meaningful communication, delivered in a variety of ways, is the best method to build lasting trust between advisers and clients, which ultimately leads to stronger relationships.” Used properly, the social networks are your best tool in the battle for more productive and efficient relationship building. These sites won’t replace a face-to-face conversation but they will make every interaction stronger and help you stay connected between those infrequent meetings.

With all this opportunity you would think advisers are flocking to the social networks. There are obviously compliance issues that have slowed adoption but there is also a lack of knowledge on how to best utilize these sites for business. The SEI report found that “only one in five advisers connected with at least one new prospective client last year.”

The companies and advisers that are going to win in this market will first figure out that prohibition is not an option, and second that true engagement will be the way to lasting and measurable business results.