Financial advisory firms position themselves for long-term profitability when they embrace the importance of client relationships. Effective relationships help firms find new clients, build their client loyalty and increase the value clients get out of the firm.

Therefore, having stronger client relationships should not just be you goal but one of your top priorities. Yet surprisingly, few advisors actually systematically map out what those relationships should be, much less build an efficient client relationship model.
Such a model works only if financial advisors use its steps in every aspect of their practice. If they devise a model and then fail to share it with their employees, for instance, then it's effectively useless.

Much can be learned by studying what the "big boys" do. Large corporations have long embraced a comprehensive approach to customer relationships. Client relationship management (CRM) typically spans all aspects of a corporate business structure, from front office to back office, and records direct and indirect interactions with clients to build a powerful database, which can be used to better manage those same interactions. Key data can be analyzed to plan target-marketing campaigns, build effective business strategies, and weigh the effectiveness of current services using a variety of criteria and metrics.

Though most financial advisory firms lack the financial resources to match the CRM initiatives of the large corporations, there are still many lessons to be learned, and much of what the giants do can be emulated (albeit on a smaller scale).

Technology considerations should include a well-rounded CRM software program that can capture all relevant information on client data, interactions and historical records. The database should be capable of collecting information about each client and his or her interactions with the firm, such as appointments; financial data (including investments, transactions, risk considerations, estate issues, etc.); personal data (including subtleties such as client interests, children's activities, etc.); the clients' requests; their survey responses; and even their participation in things like client appreciation events or their Web-site content usage, etc.

This data can and should be analyzed to better understand the needs and wants of your clients from a variety of perspectives. Survey data can often uncover weak areas in client service offerings or overdone service offerings, (for example, when you are sending them too much paperwork). By studying data on your Web site's usage, you can isolate the site's unused features or uncover a much-used area that might be expanded. Ignoring such data could be wasteful and costly and lead to client dissatisfaction. Most Web site hosting services offer this usage data, often broken down by the specific areas of the site, to provide useful tools in changing, upgrading, improving and/or deleting content.

Meanwhile, environmental scans allow you to judge your service offerings by taking into account clients' opinions, competitors' services, employee perspectives and market area demographics. You may wish to consider two ideas for information gathering when doing an environmental scan: 1.) Client focus groups. This would be a one-time session with a broad selection of clients to discuss the relative merits of current service offerings (everything from quarterly reports, Web-site features and client meeting content to client communications, etc.); and 2.) An advisory council. A more select group of clients would be asked to serve in this group. They would meet periodically (perhaps once or twice a year) and be available via e-mail for specific issue discussions relevant to the firm and its clients. An elevation to this group could be presented as an attractive appointment of some distinction (one that is recognized on a letterhead, on a Web site or through some other medium). Such a council would provide a valuable ongoing resource for bouncing ideas off clients.

Ultimately, the purpose of gathering such data for analysis is to build a client relationship model that matches the needs, wants and expectations of the client.

The elements to consider in constructing a relationship model should include:
Letters - birthday cards, anniversary cards, Thanksgiving cards, correspondence, confirmations, etc.
E-mails - announcements, nonpersonal information, invitations, alerts, requests (such as those to contact the office for an appointment, confirmations, etc.)
Phone calls - both incoming calls (with a live person), and outgoing calls (for appointment setups, etc.)
Face-to-face meetings (quarterly meetings, informal get-togethers, etc.)
Web 2.0 Functions - those functions "pushing" customized Web site content whenever the client visits your site (content such as personalized greetings, user-selectable page content features, menu item choices, etc.)
Letters and e-mails can be a very powerful way to strengthen relationships with clients by assuring that follow-up communications are timely and reassuring.

Take, for example, a client who hands you a check to be invested, after you had discussed it earlier. The chances are that the custodian would send out the confirmation to the client when the check is finally deposited. But this could take several days, and if the advisor has simply collected the check and sent no other correspondence of his own, in the meantime the client is left to worry about whether or not the money was invested correctly and on time. By immediately sending out his own confirmation e-mail or letter, the advisor reassures the client that the investment is being handled professionally and in a timely manner. This is true for most client and/or advisor initiated requests. It is simply a "best practice" to keep the client informed. With advanced client relationship management software, the task is easy and quick. With most software of this type, it can be as simple as a single button click to load an e-mail (or letter) template with personalized client information and then to send it.

A partial list of these types of communications are:
Transaction acknowledgements
Appointment reminders
Ownership changes
Meeting notes-confirmation
of decisions
Rebalancing notifications
Beneficiary changes
New client welcomes
And many, many more

The so-called Web 2.0 offers the promise of revolutionizing client relationships in a profound and compelling way, since you can tailor the content to each client and effectively personalize the look and feel of the site to suit his or her individual needs. Consider Amazon (, which creates a custom page with suggestions for additional purchases when someone views a particular product.

While it is unlikely that a financial advisory firm would tie such Web 2.0 content pushing to individual products, a subtle use of this technology might be in recognizing which pages of your Web site have been visited by a particular client and suggesting a conversation with an advisor on that topic or area of interest. You could also create an RSS feed suggestion ("really simple syndication"-a method to push news, information, etc. based on content selection). Or you can send a specific invitation to meet with an advisor.

This personal content makes the clients realize that their situations and needs are being addressed in many ways, giving them several choices on where and how they wish to receive information and communications. It also distances the firm from a one-size-fits-all approach by creating compelling personal visuals that differentiate the firm from its competition.

The financial advisory profession was built on the foundation of phone calls and face-to-face communications. And even though the profession has moved in the direction of technology, it would be foolish to ignore the power of the spoken word. Ultimately, clients want and need to hear from you, not from a recording.

The desired result of the client relationship model should be a symbiotic relationship between the advisor and the client, who have complementary goals: The client wants to reach certain financial goals, while the advisor wants to fully understand the client's financial situation and needs relative to those goals. Such a relationship can be characterized by the mutual trust and respect the client and advisor have for each other.

David L. Lawrence is a practice efficiency consultant and is president of David Lawrence and Associates (DLA), a practice-consulting firm based in Tampa, Fla. DLA publishes a monthly subscription newsletter, The Efficient Practice, which focuses on operational efficiency ( David is a much-sought-after public speaker on a variety of leadership, financial and technical topics. For details, visit