How do you define nirvana? Some financial advisors would describe the situation as one in which they are seen as the quarterback of the client’s financial team. Every time the client needs to make a big decision involving money, the first call they make is to the financial advisor. Nice work if you can get it.
At the other end of the scale, you have the hard-to-reach client. They seem to have no preferred communication channel. They will not return phone calls. They decline to schedule portfolio review meetings. FYI: You are noting these offers and refusals in your client contact system, in case problems later develop.
Some advisors have needy clients. The charitable expression might be high-maintenance. They might be older, but the more important characteristic is they are probably lonely. They are often single, perhaps having lost their spouse of many years. They mention that “all their friends have passed away.” Although they have family, the family members have found ways to blend into the background because they don’t want those frequent calls.
Your needy client tends to call you at your office quite often. They generally do not have investment-related questions. They just want to talk.
Another scenario might be they worry about the economy and want to be reassured. This reminds me of a story about one of my former clients, back when interest rates were high and the stock market was dismal. He called one day and said, “I am really worried about the stock market.” I replied, “Why? You don’t own any stock!” He was a municipal bond buyer!
The lonely client can also take your desired “financial quarterback” role a step too far, asking you to make all financial decisions for them, regardless of size. “I got this mailing from a charity. They sound nice. How much should I send them?”
Strategies for the needy client
Let us look at this situation from two points of view: The needy client and the lonely client.
Here are several ways you can address the situation of the needy client:
• Ask them to consider investing more money with you. This has been around for a while. If you feel a client is calling too much or calling about genuinely unimportant matters, whenever they call, end the call with an investment idea. “I am glad you called. We have this new income fund…” Future calls will probably be limited to genuinely important issues.
• Schedule portfolio reviews and calls for the year. Sometimes clients call every time the stock market drops 100 points or more. Back when the DJIA was 2,246 on Friday, October 16, 1987, the 508-point drop on Monday, October 19, represented a 22% drop. Today, with the DJIA around 34,695 (August 29, 2023) a 508-point drop would be less than 1.5%. The percentage is less, but it looks scary when expressed in points. Clients have a legitimate fear. You can remind them that they have a sit-down review on the calendar 10 days from now, but if they feel strongly about this, they can move it up to the day after tomorrow. Your client might have forgotten about the upcoming review and may be willing to wait.
• Explain the roles of team members. It can be tempting to say, “Don’t chase after paperwork problems. Call my assistant!” This is the wrong approach. You want them to feel your door is always open. A good approach is to truthfully explain how these problems get solved. “I am glad to talk with you, but it might be a while before I can call back. Once we talk and I get the details, I will hand them to my assistant, who will follow up. The problem can get resolved faster if you tell my assistant about it first.” Make the case that issues are handled faster if they talk to the right person.
• Agree on a time of day. I always felt a client who gave me plenty of business in years past still has a claim on my time in the present. That’s one of the reasons I will help a past client even though I am no longer in production. I had an actual call that went something like this: “Do you remember that utility preferred stock we bought in the mid-1980s?” (Yes, I helped them as best I could!) If a client wants to talk, let them know chatting during market hours is not the best idea. Set parameters before or after the trading day. Try to limit these calls to your office phone number.
Strategies for the lonely client
Some clients just want to talk. This takes you outside the business sphere of conversation. You are now entering the world of the analyst or life coach. This isn’t your profession, but some of it is intuitive. Here are potential strategies:
• Let them down gently. Some clients seek a romantic partner. It happens. It might not be clear that you are married or in a committed relationship. You can tell when love is on their mind. Good strategies include having family photos around your office and bringing your spouse up in conversations. (Lieutenant Columbo was great at that!) You want to let them down gently.
• Suggest they send birthday cards. Your client has family, they are just not in touch very often. Ask if they send family members birthday and anniversary cards. These cards usually get a phone call in response, especially if a check is enclosed. This works well if your client is older. There is a saying, “Money can’t buy happiness, but it keeps the kids in touch.” With older clients, the prospect of future inheritance can bring extended family back into their lives.
• Offer ways to make new friends. Your client does not live in a bubble. They likely belong to a religious organization. There is a senior center nearby. There are special interest clubs. They should make new friends, ideally younger ones. You might do some groundwork research beforehand, giving them some ideas.
• Bring up Facebook. According to Business News Daily, there are about 47 million seniors in the U.S. About half are active on Facebook. This can be an ideal way for them to connect with friends near and far.
• Suggest a cruise. If your client can afford to travel and lives near a home port, cruising is a great option. Generally speaking, about a third of cruise ship passengers are age 60 plus. This varies considerably by cruise line. Disney Cruises will attract a younger audience.
Some cruise lines are for “adults only.” They usually attract an older crowd. It is easy to make friends at sea because the timeline is accelerated.
You do not want to alienate any clients. Some give and take is needed, even when a client appears “needy.” Taking the time to understand their needs can go a long way in demonstrating your value as their advisor.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor,” is available on Amazon.