There are three reasons financial advisors should be choosing thoughtful gifts for clients year-round, according to industry experts: appreciation, retention, and business development.
And notice the emphasis on “thoughtful gifts,” not just “gifts.”
“If you’re just going to look at a catalogue where you can pick a category—a calendar, a pen, or a stupid clock—is that really a message you want to send to a client?” said Brett Bernstein, CEO and co-founder of XML Financial Group headquartered in Bethesda, MD. “Gifting is important. And just as a great gift leaves a lasting impression that reflects on the firm and its relationship with a client, so does a bad gift.”
Luckily for financial advisors today, there’s a choice: become a gift whisperer as a source of personal pride, for those who like to shop and get elbow-deep in card stock and the beauty of well-chosen messaging, or outsource the bulk of it, with room for a personal touch when appropriate.
“Gifting is part of relationship-building, as it creates loyalty and shows appreciation,” said Rob Pettman, executive vice president, LPL Wealth Management Solutions, which recently chose the outsource option for its 21,000 financial advisors. “Many of the gifts available are customizable, so that advisors can send items that they know will have the biggest—and more personalized—impact on their clients.”
Anything to make gifting easier and better so the advisor can focus more on their core business, spare clients another meh bottle of wine, and keep that stupid clock out of a landfill, sources said.
Focus On Quality Items That Achieve A Goal
Finra Rule 3220’s limit of $100 on a client gift for a single person or $200 for a couple is generous enough to curate a small collection of thoughtful, personal and meaningful gifts that tick all the boxes: actually appreciated, something the client will display or talk about to colleagues and friends, and impressive enough to keep the firm top of mind.
For Bernstein, meaningful gifting is a skill he nurtured as he moved from starting as an employee advisor in 1996 at Merrill Lynch, to joining a broker-dealer affiliate at LPL Financial, to launching under his own banner.
“I like to say I went from prison to halfway house to full release,” he said. “And in that I was able to see how gifting is used in different situations. I do think it’s important. There are different ways of thanking someone for giving a referral, and a gift is a nice gesture. But I’ve seen that there are industry standards, and then there’s my firm’s standards.”
Bernstein said he personally chooses the gifts that his firm deploys, whether it’s a quick birthday salutation, a pair of sporting tickets or a handmade living room throw. And he uses the categories of business retention, appreciation and development to know the right note to hit.
“There are important differences in that process. And I don’t want crap. It’s got to be something I would use myself,” he said. “For retention and appreciation, no matter what there should be some personalization to it. We try to do handwritten cards with everything that goes out. The cards themselves are beautiful—very thick, embossed with XML.”
For referrals, Bernstein said he sources a very high-end throw blanket, presented in a beautiful box with a handwritten note of thanks.
“And we deliver it to the client’s office, where it has a lot of impact as it’s walked down the hall,” he said. “We often get additional referrals just for that.”
For business development, Bernstein sometimes gifts tickets to sporting events, or sometimes sends something more customized if he knows meaningful details about his contact.
“I don’t drink, but if I know someone is a wine lover, I can send a subscription to Wine Enthusiast with a handwritten note. Or a bottle of wine with a handwritten note saying, ‘My wife and I were in Napa and came across this fabulous bottle,’” he said. “Those touches matter. They set us apart as a firm.”
And when Bernstein was younger, he thought when he gave those game tickets that he should go with his client. But that perspective, too, has changed from the transactional to the meaningful.
“Now I want to see the client’s photo of them sitting with their grandchild, enjoying the game, he said. “More appreciation and thanks, and a little less business.”
XML, which serves some 5,700 individual and high-net-worth clients and has more than $2.3 billion in assets under management, does not gift around the end-of year holidays. Like most successful gifters, Bernstein said the firm prefers to choose moments where the gifts are tied to an interaction with a client, not prompted by a turn of the calendar page. For the holidays, a lovely card expressing warm sentiments and a charitable donation is more than enough.
“When we do our holiday card, it goes out the week after Thanksgiving and expresses our thanks for their trust in us,” he said. “And then we wish them a beautiful holiday season. In that sense, it’s very generic and meant to cover everything we can.”
The only downside to his hands-on approach is that it can take time for sourcing the gifts, selecting the packaging and carrying the idea of quality all the way through to the bespoke card stock used for that handwritten message.
But it’s also inherently flexible for a gifter with imagination.
“During the pandemic lockdown we sent out Jenga sets, so families could spend an evening playing together, and XML was branded on the game,” he said. “So there we were in their living rooms, with them, getting through that. It meant something.”
The Opportunity To Create Community
Some firms find gifting options that work so well for them and their clients, that they become part of the firm’s signature.
Van Leeuwen & Co. in Princeton, N.J., for example, is a holistic wealth manager with roughly 230 individual and high-net-worth clients and $274 million in assets under management.
The firm, led by Ken Van Leeuwen, starts with the usual Thanksgiving card to express gratitude for their relationship. And there’s a birthday card, too, signed by everyone who works on that client’s team. But it doesn’t stop there.
The primary contact calls the client on their birthday, too, to wish them good health and happiness, and if they don’t pick up, the advisor leaves a warm voicemail.
“They like that. My clients in many cases could buy themselves anything they want. So on their birthday, they just like being remembered,” Van Leeuwen said.
If someone refers an individual or some type of new business to the firm, Van Leeuwen has a standard gift—a Tiffany wine glass. And it’s always a single glass, so as to be Finra-compliant and not seem to be incentivizing people to use the firm just to get the glasses.
“The magic of getting that blue box is as impactful as what’s in the box,” he said. “Both men and women love it.”
New clients receive a very high-end bound notebook with a status pen, along with a beautifully presented welcome kit. There’s also a golf outing every year, with a lunch first, then a round followed by light hors d’oeuvres and cocktails.
But the special signature of Van Leeuwen & Co. is its intimate dinners, held twice a year in spring and fall.
“We don’t do large events, like wedding-style receptions,” Van Leeuwen said. “We asked our clients, and they said they preferred smaller affairs—a nice dinner for 20 at a nice restaurant. So that’s what we started doing, and the results have been beyond what I imagined.”
The firm tiers the choice of restaurant and the guest list to how they rank their clients, so clients in similar situations end up meeting other clients in the same boat. As host, Van Leeuwen attends each dinner and brings the team or teams that are serving that night’s clients. “If they have direct contact with the client, they go,” he said.
“These clients start to know each other and look forward to seeing each other at these annual events,” he continued. “Frankly, they feel special. And people of that ilk like to know they’re special, and not just one of the masses.”
By bringing the whole advisory team, Van Leeuwen continues to foster the team atmosphere the firm promotes. And the timing of the dinners—in spring or fall—is designed to catch everyone at their best.
“We have a client advisory council where we bring clients in and ask their opinions, and on this a lot of people said they go to plenty of Christmas parties and don’t need another,” he said. “We wanted to stick out, and we wanted them to attend. So the spring dinner is in late April or early May, when our clients have exhaled after taxes. We don’t do taxes, but they’re doing taxes and sometimes they’re paying taxes. So a little room there is a good idea. And the fall dinner is before the holidays.”
The only rule is not talking business.
“We’ll have a cocktail, a glass of wine, a nice meal, and we’ll be together,” Van Leeuwen said. “Our goal is to create community. They don’t need to feel like we’re selling them something.”
For Advisors Short On Time, Or Imagination
And if all talk of meaningful gifting, handwritten notes and intimate signature dinners is too stressful to even contemplate, financial advisors around the country have more help now than they ever did, as companies are emerging to fill that function without the cheesy water bottles and branded ballpoint pens.
One such company, Client Giant, was recently contracted by LPL Financial as a preferred client care option for its 21,000 financial advisors, should they want to go that route. Although Client Giant serves employers and business in all sectors, the company has a gifting team specifically for financial advisors. Not only does the company stay within the monetary guidelines, it also provides custom reporting to ensure the firm remains NASD, Finra and SEC compliant.
Like the advisors who painstakingly choose their firm’s gifts, Client Giant avoids the expected holiday gifting, replacing it with much more meaningful and useful gifts throughout the year.
“The average financial advisor, if they’re doing gifting, will say of course they send something at the holidays, and of course they send a bottle of wine. Or a branded something,” said Jeff Jackel, the company’s co-founder and chief strategy officer. “But how many of those clients actually drink wine? Do you know? Or the branded things. Do you know the data on how much of that stuff just gets tossed in the trash or put in the attic or given to Good Will, hopefully?”
Jackel said his company doesn’t look at gifting as something done once in a while, but something that should be done regularly—at least quarterly.
“We create a cadence of touches throughout the year to take care of people in what we call ‘moments that matter.’ And we call it a touch because it’s more than just the gift. It’s the messaging, the packaging and the timing,” he said.
Since the touches are strategic moments for the financial advisor, the Client Giant team bases its gift selection on the shifts of seasons, using data from trend-forecasters and socio-psychologists to inform its choices. A round of internal testing followed by a round of external testing is completed before a gift is ready for shipping.
“We see what’s getting the biggest reaction and having the biggest impact. It’s kind of incredible because it gets more sophisticated with every gifting cycle. We’ll get feedback like, ‘This was the best gifting cycle ever! Who knew my clients were obsessed with charcuterie right now?’ Well, we knew, because we did extensive testing on this,” Jackel said.
For that particular winter gift, Client Giant partnered with an author of “Platters and Boards,” a photography-heavy manual on how to create charcuterie plates and cheese boards, among other nibbles displays. Single clients received the book, and coupled clients received the book plus an Acacia serving board.
Other recent gifts included: this fall’s salt cellar set, including the salt, a red walnut cellar and an elegant golden spoon for use, and a card wishing the recipient a little extra luxury at their social gatherings; the summer’s iced tea set with hibiscus rose and lemon ginger teas, and a pyramid infuser; and last spring’s Friendsheep Dryer Balls, a set of three balls that replace fabric softener and dryer sheets, adding a carbon-neutral alternative to the laundry aspect of spring cleaning.
For LPL Financial, the relationship with Client Giant filled a gap revealed by one of its own surveys, Pettman said.
“According to a study LPL conducted, 84% of advisors surveyed value celebrating key client life events, but only 41% of those advisors kept up with those events,” he said, adding that 96% indicated they were interested in a service to assist with life events and client engagement. “Client Giant provides an efficient solution that prioritizes those high-touch moments that are critical to building strong advisor-client relationships, and in a way that allows advisors to focus on their core business.”
So when an LPL RIA that used Client Giant felt it was an important part of how they deliver a meaningful experience to their clients and said so to management, LPL jumped at the chance to give all of its advisors the same opportunity.
“We knew other advisors might feel the same. We’re all about finding solutions for advisors that they’ve told us would be helpful to their business, including streamlining or outsourcing some of their day-to-day activities,” he said.
And gifting often falls into that must-do, but no-time-to-do category.
“The people I talk to are waking up to the idea that genuine thoughtfulness and taking care of somebody with a gift that has no reason, no strings attached, and is an honest show of appreciation, it’s almost more impactful than it should be,” Jackel said. “It’s a big bummer that what we do works so well. It means that people aren’t used to being treated right.”