So many vendors are trying to serve independent advisors these days that it's impossible to keep up with them all. So to help you separate out some outstanding vendors, here's information about two I've come across recently that serve specific needs.
While almost no business owner would debate the value of conducting a client survey once every two or three years, it's safe to say that the vast majority of independent advisory firms fail to ever make it happen. While conducting a client satisfaction survey sounds like a pretty simple thing to do, it actually isn't all that easy.
You have to decide on the right questions to ask, and write them in a way that does not bias responses. Then the questionnaire must be formatted, and a personalized cover letter should be written. You need to address each envelope, place a stamp on it and stuff it. Then, take the mailing to the post office. And it's not over.
When surveys are returned, you'll need to collate answers from each response. The results must be aggregated and analyzed. You need to look for patterns across your whole client base and also focus on opportunities for improvement with individual clients. Finally, you need a plan to implement any changes clients are asking for.
Because the process of surveying clients is outside of your daily activities, finding the time and staff to dedicate to the task can be difficult. As a result, an important but not urgent task like this frequently gets put off for months, or it never gets done, because you're so busy with day-to-day activities. That's where Toronto-based AdvisorImpact comes in.
I first heard about it from Bob Klosterman, who runs a successful Minneapolis advisory firm. I know from personal experience that Klosterman is not always easy to please. So when he praised AdvisorImpact, I asked other advisors if they'd had similar experiences. Several reported that they, too, were satisfied with the client surveys administered by the firm. So I called Julie Littlechild, the founder and CEO, and asked for details.
Littlechild says AdvisorImpact has six employees. Although Canada-based, 90% of the company's revenue comes from sales to U.S. businesses. Since it was founded about five years ago, Littlechild says, the firm has conducted about 650 surveys, with the vast majority of these occurring in the last three years after the product was thoroughly tested. It's called Client Audit.
Littlechild says the average independent advisory firm sends out about 250 surveys, and the average response rate to the 40,000 surveys AdvisorImpact has sent to advisor clients is about 40%. However, she says the response rate varies greatly, and some firms get a 70% response rate. Your rate depends on how deep your relationships are, the types of clients you serve (pre-retirement professionals, for instance, are less likely to respond than retirees) and how good your firm is at customer service.
The surveys are customizable. You pick the 20 or so questions you want to ask your clients from a long list. Only one or two of the questions are open-ended, thus allowing clients to breeze through the process of responding. Surveys are mailed in hard copy to your clients. The mailing includes a link that can be used by clients who prefer responding online. Littlechild says that about 60% of clients still respond in hard copy rather than online, and about that same number still prefer to communicate in hard copy.
Littlechild says the surveys ask fairly simple questions. Overall satisfaction, of course, is one of the obvious ones. But then the survey drills down into components of satisfaction, such as whether:
The firm is communicating with you enough;
You like the team at the advisory firm;
You feel you receive good value for the fee paid; and
You are satisfied with the advisory firm's investment performance.
Littlechild says it is not enough to know which aspects of your service clients are dissatisfied with. You must also know which components of your services are most important to your clients. "Without finding out what's important to clients, you could try improving aspects of your service that clients don't really care about," she says.
Perhaps the best benefit of the client survey is what you learn about individual clients. While the aggregate data can point to strategic initiatives your firm must undertake, reading answers from individual clients will tell you whether a particular client is reluctant to give you referrals or will alert you to broaden the services you provide the client-for instance, going from investments only to estate planning and insurance. The survey also can show that you manage only a small share of the client's total investable assets, possibly alerting you to make a concerted effort to deepen the relationship.
Littlechild says there is no right time of the year to send your client satisfaction survey. Clients seem to respond at about the same rate all through the year. However, she says advisors should only send their surveys out when they have time to analyze the results returned by clients and to make changes in their practice based on the research. In fact, she says, the biggest challenge to advisors is not getting the survey done but acting on the data. "You don't want it to just become a pile of statistics sitting on your desk," she says.
To help you avoid such an outcome, AdvisorImpact provides some ways to help you implement change. After each client audit, a staffer spends 30 minutes on the phone with you explaining the survey's results and how you can act on them. In addition, a CD is provided from which you can print out an agenda to guide meetings with each client. The meeting plan is personalized, based on each client's survey responses. So while you are meeting with each client, you have a summary of his or her survey responses and can address key issues of concern to individual clients.
AdvisorImpact's (www.advisorimpact.com) Client Audit costs $2,300, but as a courtesy AdvisorImpact has agreed to provide Financial Advisor's readers with a discount similar to what it offers through custodians and broker-dealers that market their service. In the interests of disclosure, neither I nor the magazine receive anything for this.
When he was just eight years old, Scott Farnsworth's mother died of cancer. "Just before she died, my mom gave my dad a letter and instructed him to give it to me when I turned 12," says Farnsworth. "As you can imagine, that is one of the treasures in my life to this day."
Farnsworth says the letter was written to a 12-year-old on the cusp of becoming a teenager. "She told me how to be a good person," Farnsworth says. "She said that even though she couldn't actually be there with me, that a part of her would be with me always."
The letter helped shape Farnsworth not just personally but professionally: As an estate planner, Farnsworth has created SunBridge Legacy Builder Network, a service that trains advisors in a different style of estate planning. His mission is to allow people to experience what he did as a 12-year-old boy, to create estate plans that profoundly affect your heirs and reflect your values.
Farnsworth, an attorney and certified financial planner licensee, says he started the service after a client questioned him sharply about how his trusts were connected to the life he had lived. "I couldn't really answer him," he admits. "So that has been my journey for the last 12 years.
"We all have a larger wealth that goes beyond money and property. It includes the wisdom we acquired, the insights that have allowed us to make better decisions as we get older, and our heritage. When you add that in with money and property, then you pass along real wealth."
The notion that estate planning must be more than the mechanics of GRATs, IDGTS and QTIPs is not new. What is fairly unique is the systematic campaign Farnsworth has created to allow financial advisors to integrate client values into estate plans.
It is not uncommon for a financial advisor to neglect the human side of estate planning. After all, it's not as if this is a big part of the curriculum when you become a certified financial planner, certified public accountant, chartered financial analyst or any of the myriad other primary designations awarded to advisors. As a result, many, if not most, advisors are deficient at the "soft side" of estate planning.
(I don't like calling it "soft," by the way, since that implies that mechanics is the hard side of estate planning. In fact, it is much harder to develop the people skills to do values-based estate planning than to remember that a grantor trust avoids depleting an estate with taxes.)
In failing to master these people skills, advisors are blowing a huge opportunity. After all, lawyers are going to be the ones to draw up estate planning documents. So you don't need to know all the intricacies of every type of trust. You just need to master the basics. Where you can add value in a client engagement, however, is in integrating a client's values into his or her estate plan. This is also a way of deepening your relationships with clients because the exchanges can be so personal and profound.
Farnsworth has created a series called "Priceless Conversations" in which an advisor presents a client with questions that inspire deep conversation. The series focuses on a range of topics, including your wisdom, values, stories, the meaning of success, the meaning of money and your children. (The full list of topics is available at www.sunbridgelegacy.com/practical_tools.htm.)
My wife and I spent about 40 minutes on the phone with Farnsworth to go through the "kids" conversation. I had interviewed him a day earlier and my wife had never previously spoken with him. I told my wife, Mindy, almost nothing about what we were doing, just that it was about our estate plan. I just gave her the one-page sheet of 12 questions Farnsworth had e-mailed me and asked her to spend some time thinking about the answers.
Despite the fact that we were not engaging Farnsworth, did not know him and were doing this all over the phone instead of in person, his questions about what we wanted for our kids if we were to die today propelled my wife and I into an emotion-filled conversation about 15-year-old Alison and 14-year-old Jason. We articulated our views on topics that we had never before actually spoken about, like the role of religion in our lives, what we wanted the guardians of our children to know and how we might be able to support our two children's differing needs.
Some of the questions included:
Please tell me a little about each of your children, especially the things you admire and appreciate about them and their talents and strengths. What makes you proud to be their parents?
What values, principles and life lessons would you most want to pass on to your children if you could? What makes those things important to you? How will those things make a difference in their future happiness?
In what religion or spiritual tradition have your children been raised? How important is your religion or spiritual tradition to you and your family? What are your wishes regarding their future participation in a religion or spiritual tradition?
Are there specific people you have not named as guardians but you want to ensure that your children will maintain a relationship with?
By the time the conversation was done, Mindy and I had thought about ways that we could support our children's different needs. Alison, an adventurer, could be given a travel stipend annually. Jason, a doer, could be treated to semi-annual visits with successful friends of mine who could become professional coaches. Money could be earmarked to fund memberships at places of worship and for education of the next generation.
By promoting a discussion about what is important to Mindy and me-and not just focusing on the mechanics of protecting our estate from taxes-the estate plan we devise can be focused on supporting our values, making the plan far more meaningful to my wife, myself and our children.
Farnsworth cites many such stories. There's the divorced entrepreneur with three sons, who set up an advisory board that would assist her children if they ever wanted to start their own businesses. A devout Catholic, she also drafted an estate plan that provided funding for her children to visit sites of religious significance.
Farnsworth has fashioned a successful small business, which he runs from his home near Orlando, Fla., by coaching advisors to high-net-worth individuals. While he is of counsel to a law firm and still serves his own estate planning clients, his main pursuit these days is SunBridge. Farnsworth says that till now it has been attorneys who have embraced the program, but he hopes financial advisors will join the SunBridge Legacy Builder Network.
Farnsworth hosts eight two-day retreats, which typically draw 12 to 24 attorneys. The two-day sessions cost $1,000 and are held in Orlando, Atlanta and Denver. For $99 a month, you receive a membership to the Legacy Builder Network, which provides a variety of benefits including the right to private-label SunBridge materials, use of its Priceless Conversations and other tools with your clients, monthly newsletters and monthly conference calls.
Farnsworth sent Mindy and me a CD with the conversation we had about our children. We've put it in a safe place for the kids to listen to one day.
Andrew Gluck, a longtime writer and
journalist, is CEO of Advisor Products Inc., a Westbury, N.Y.,
marketing company serving 1,500 advisory firms.