The economic uncertainty of the past several years has forced many affluent clients to consider changing financial advisors. However, advisor coaching expert Matt Oechsli believes that elite advisors should see this client dissatisfaction as an opportunity to capture new customers and assets.
"When should it be easier to bring in new business? When markets are going up for years and years and years and everybody is fat, dumb and happy; or when the proverbial you-know-what hits the fan and everything is turned topsy-turvy? When should it be easier to bring in new business?" Oechsli asked rhetorically during his presentation at RBC's Women's Association of Financial Advisors conference in Minneapolis. "NOW!" he roared back to the 100 audience members.
Oechsli, founder of the Greensboro, N.C.-based Oechsli Institute, paraphrased a bit of wisdom from Warren Buffet that you only know who is swimming naked once the tide goes out and observed: "There are a lot of naked advisors out there who made promises but weren't following through."
According to the institute's survey of affluent investor-respondents who have more than $1 million of investable assets with an advisor; 42% reported that they were very satisfied. "But that still leaves 58% of affluent investors vulnerable to making a change," Oechsli pointed out. The problem is that advisors do not know how to make the right approach. Too often, he said: "They talk too much. They're too quick to talk business.
Oechsli warned the advisors not to start with trying to get referrals. "It's awkward," he said. That's backed up by the survey, he said, adding that 83% of respondents had a negative feeling about being approached for referrals.
In response to that finding, Oechsli suggested that advisors move into some uncharted territory with their existing clients. Rather than simply blasting out newsletters, a better approach would be for the advisor to invite clients to a non-business lunch or send a congratulatory note on a child's graduation. The idea is to build relationships through the client's personal interests, he said. "How do we uncover connections?" Oechsli said. "We do it by having conversations. 'So who did you play tennis with last week, who did you go cycling or on that fundraising with this weekend?' Birds of a feather flock together."
Adding that social dimension allows advisors to then ask for personal introductions, Oechsli said. According to the survey, 86.3% of clients who have a business and social relationship with their financial advisor are more likely to offer a personal introduction to a colleague or friend (if asked) compared to 73% of clients who have a business-only relationship with their advisor.
"You're taking relationship management with your existing client and relationship marketing and you're blending them together in one activity, penetrating spheres of influence and social prospecting and redirecting conversations without coming across sales-y," Oechsli explained.
Research from the Oechsli Institute showed that affluent female clients were more concerned than their male counterparts with having a personal relationship with their advisor. Listening ranked 12 points higher in importance among affluent women. Having an advisor who had a breadth and depth of industry knowledge scored 17 points higher and having the family's interest at heart was 10 percentage points higher.
"The skill sets of the elite advisor to me are many of the core skill sets that women bring naturally to the table," Mary Zimmer head of U.S. and international wealth management services and solutions at RBC said. "The listening skills, getting-to-know-you. Obviously building a business involves being able to get the business and the sales aspect, but also the soft touch; picking up on cues, and inclusiveness-whether it be the spouse or the kids-and figuring out what's on their minds. They naturally get to know people. They get more involved."