Lewis Schiff
Lewis Schiff
Eight Trends in Affluent-Client Communications
For advisors working with affluent clients, stronger communication channels boost productivity, satisfaction and profitability.

October 21, 2010
by Lewis Schiff

Nothing will completely replace the benefits of face-to-face client meetings, but the pressure for greater efficiency and convenience propels advisors to try new means of communication. Not surprisingly, most new channels appear with new technologies or updated applications of old techniques. Both clients and advisors can benefit from trial runs and the eventual adoption of new methods that benefit practices.

Advisors also need to keep pace with how their clientele is communicating today. While many in the financial industry still seem to believe that mostly teens and college kids have Facebook pages and tweet their friends, the demographics show that grandmas and grandpas in growing numbers are doing it too.

1. Productivity Is Connected to Tech Dollars Spent

Broker/dealers who carve out larger annual budgets for technology have more productive advisors, according to a study by Cerulli and the Financial Planning Association (Cerulli Associates, 2009: The Cerulli Edge Advisor Edition, Second Quarter). In general, the right technology correctly applied drives higher levels of practice efficiency and allows staff members to take over tasks formerly assumed by advisors. With the saved time, advisors can devote more of their energies to client relationships and building their practices.

2. Advisors Spend Much More Time Online

Months of market turmoil have propelled advisors to spend much more time online — 25 percent of them spent an additional three hours weekly looking for ideas to build their practices, reviewing client information and communicating with clients, according to a report released last Fall from the financial industry research and consulting firm kasina (Kasina, 2009: What Advisors Do Online 2009). Interestingly, the use of technology was tied to an advisor’s age, assets under management and type of practice. For example, advisors aged 36 to 50 used BlackBerrys to access online content — not just e-mail — more than any other age group and another 10 percent planned to start using Smartphones in that way. While social media is growing, it certainly is not universal. Only one of two (48%) of advisors visited LinkedIn, while under half (43%) visited Facebook.

3. Multiple Channels of Communication Are Best

Successful relationships with affluent clients depend on many factors, but a Forrester study (Forrester, 2009: U.S. Millionaires Use Multiple Channels to Interact With Their Financial Advisors) unearthed a surprising technology influence. The more channels (in-person meetings, phone calls, e-mails, secure website messaging, etc.) each client uses to communicate with an advisor, the greater the level of satisfaction with that advisor. Frequency of contact drove satisfaction too.

According to the study, most wealthy clients already interact with their advisors via many means:

  • Most wealthy clients interact with their advisors via at least three channels.
  • Almost 60 percent of those who use advisors have communicated with their primary advisor using three or more different channels in the past 12 months.
  • Clients prefer and find the most satisfaction from telephone and in-person meetings.
  • For e-mail, two-thirds (62%) consider it an acceptable mainstream method of communication.
  • For the younger affluent, two-thirds use secure messaging on a website to interact with their advisors. In general, however, secure Web site messaging, online chats and instant messaging, have mixed levels of acceptance.

4. More Senior Clients Tweet and Surf

Most wealthy investors of all ages spend time online each week, with more than 90 percent of those devoting at least one hour to working on financial activities, states a Spectrem Research finding (Spectrem Group, 2009: Communicating Effectively With Investors). Surprisingly, the study discovered that the 18- to 50-age group and the 51- to 60-age groups spent almost identical hours online. For those over 61, however, many more didn’t touch a keyboard, but for those who did, half spent up to 10 hours online and a third (32%) stayed in front of their monitors for more than 11 hours.

5. Compliance Prevents Many Advisors From Using Social Media

While more of your senior clients may have jumped into Facebook, Twitter and rest of the social media world, you may be stuck in place like so many other advisors at the compliance roadblock. While some independent advisors have taken a running leap into the social media pool — and numerous advisor consultants have shown how easy the software is to use — many of the larger financial services firms remain extremely conservative about what they allow advisors to say — even on very basic LinkedIn pages. Once the Financial Industry Regulatory Authority (FINRA) releases its upcoming new guidance on social media — especially the details about approvals prior to posting new content — the firms may relax some, but their concerns go beyond FINRA to include liability and branding concerns, for example.

6. Communicating Proactively Means More Than Making a Call

Although many advisors added staff in recent years to service client needs, those employees with more experience in back-office tasks weren’t much help when the phones started ringing as the markets trembled.

While it’s important to remain sensitive to each clients’ preferred communication channels, those preferences evolve, as the trend data above indicates. The last three decades have brought major changes in communication opportunities — and attitude reversals. Many people were initially reluctant to carry and use cell phones in the early ’90s and a decade earlier the term “personal computer” sounded like an oxymoron to millions who viewed it as a geek’s technology box they never expected to have in their homes.

7. Advisors Can Connect to More Clients Via Video and Audio Conferencing

Video conferencing has recently taken off as a new communication tool, particularly by firms with high-net-worth (HNW) clients. Few firms can conduct market and economic meetings one-on-one, so they do briefings online and invite people to video conferences, notes Joel Bruckenstein CFP, CMFC, publisher of the Technology Tools for Today newsletter. This tool can be especially effective with clients who travel often or live part of year in other residences they own. In the future if there is a market drop, for example, advisors would already have video conferencing capabilities in place. They would send an e-mail to all their clients saying, “If you’re worried about today’s stock market action, tune in at 5:00. We’re going to have a little video discussion on it and you can ask questions.” Instead of making 50 individual phone calls, they would use email and other meansto invite clients to the conference. Advisors would also have the advantage of adding stronger visual elements, such as PowerPoint slides prepared ahead of time and whiteboard notations to illustrate key points during the online meeting. It’s also easy to record the sessions and post them as videocasts of the event on a website for viewing by other clients who couldn’t attend live — and for prospective clients wanting to learn more about a potential advisor. The recordings also provide advisors with the opportunity to review their presentation skills and refine them for next conference.

8. A CRM System Can Drive Communications and Efficiency

While some advisors have aggressively pursued efficiency with new applications for unified investment platforms, financial planning, document sharing, customer relationship management (CRM) and secure websites from which clients can download their statements, the majority seemed to be figuring which functions they need and how it all works together. Improving workflow and sharing of client data across platforms so it doesn’t need to be entered several times into different applications is the focus of many in the industry.

When all staff uses it with a clearly defined workflow, a CRM would become the central repository for all client data, activities, task management, reports and documents. Meeting notes, e-mails, phone calls, new opportunities, task status, etc. would all be available. While the benefits may be clear, adoption has been gradual. At least one prominent firm with ultra-high-net-worth (UHNW) clients still uses spreadsheets as their “CRM system.”


New technologies have played a major role in the growing number of independent advisors and in the transformation from commission to fee-based practices. Today, even sole proprietors living in rural areas have access to sophisticated financial planning applications and retirement planning tools plus a full range of products on one platform from broker-dealers.

The most recent period of market turmoil has once again proven that regular client communication remains the heart of a practice built for the long term. When clients initiate most contacts or when advisors learn much later about major family events, the communication bonds aren’t strong enough. Technology can help.

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Lewis Schiff is a senior managing principal of Advanced Planning Group, a family office network for advisors.