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Driving force

Poor service and lack of client contact are often the reasons why businesses lose clients but creating a consistent review service will build value and ensure your clients’ financial engine is running smoothly

In delivering a first-class client experience, there is no question that client reviews are a key factor. I have recently spoken to a number of firms which acknowledge that their client reviews are inconsistent and therefore the client experience differs, depending on the individual adviser. Indeed, not all clients who have been promised a review necessarily get one. This may be a harsh assessment but in far too many instances, it is true.

In this and the next Adviser Evolution, I will specifically look at the following questions:

  • Why is a review service important?
  • What are the principal reasons for developing a consistent and robust review service?
  • What makes a review service stand out in the client’s mind?
  • What should the review service look like?
  • How can we price it to be high value to the client and profitable for us?
  • What benefits accrue to my business once the review service is established?

Why is a review service important?
Financial advice is no longer about selling a product or providing the initial advice. Advice has a sell-by date. Even if it is the best possible advice at the time it is given, its value will be eroded over time as a result of changes to legislation, tax law, investment markets and changes in client circumstances.
At the core of what advisers do is working with clients, hopefully over a lifetime, to ensure that their affairs are in order based on the financial and legislative conditions at the time.

Reasons for creating a consistent review service
If the above is not sufficient to get you thinking, there are two major reasons for establishing some form of ongoing review service for your clients.

1: Financial You will make more money. The client review underpins recurring revenue, which is a key factor in building business value. Each review is also a great opportunity to identify new advice opportunities and generate referrals from those clients. Indeed, one client I work with generates over 50 per cent of new business revenue from existing clients which reduces the need to constantly find new clients just to pay the bills. You will also be more profitable because the cost of retaining existing clients is lower than the cost of finding new ones. The referrals will be more receptive to your services as your credibility has been established by the referrer.

2: Customer service reasons clients expect it Poor service and lack of contact are very often the principal reasons that advice businesses lose clients. Clients do not complain (typically) they simply vote with their feet. An effective review service can address that. Research from the US suggests that a service business should have 12 20 “touches” a year with top-end clients. Yet many existing client banks contain a lot of “dormant” clients who have not been contacted for some time.

What’s more, the type of customers you are looking to attract, (mass-affluent to highnet-worth) need ongoing financial advice. For most people like them, life is too busy and too complex to operate without some sort of ongoing advice. It is difficult enough as an adviser to stay on top of everything there is to know about investments, legislation and tax, so how can you expect your clients to cope?

By reviewing a client’s circumstances proactively and regularly, you can stay on top of their issues and get to know their needs well. This allows you to deliver the highest possible value over time. As with physical health, the key to good financial health is to follow a simple financial maintenance programme and to have regular check-ups to make sure everything is working as it should.

What makes a review service stand out in the client’s mind?
Until clients go through a review meeting with you and come out the other side, they are not in a position to judge its value. However, we can position it as a high-value service by stressing how important regular reviews are.

A well-structured review meeting with a clear agenda provides the framework for you to deliver something of tangible value to clients in a systemised and consistent way. Some things that might form part of that agenda are:

1: Changes to client circumstances
2: Review of client goals
3: Review of financial plan as a result of 1 and 2
4: Investment performance review (is everything on track)
5: Suggested changes to investments as a result of 4
6: Review of changes to legislation and how they affect the client
7: Issues and opportunities presented by these changes

Next month, in the second part of this article, we will look at what your review service should look like, how to price it profitably and what benefits will accrue to your business once your review process is embedded.

Steve Billingham, Director, Steve Billingham Consulting


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