Typically, the client-advisor relationship takes the form of one-on-one connections in something of a hub-and-spoke model—the advisors in the center with lines of communication and interaction extending out to clients.
While this traditional approach contains its fair share of benefits, over the long run, relying exclusively on this model will limit the ability of financial advisors to add more value to their client relationships, and negatively impact their businesses.
Instead, it’s time for financial advisors to replace the antiquated hub-and-spoke service model with the creation of a truly interactive client network that drives a greater sense of community, shared purpose and relationship loyalty.
How The Client Network Model Works
Here’s how the client network operates: It’s no secret that successful financial advisors typically serve professionally successful clients. Many of them are in different professions or own various closely held businesses, and they would be open to getting to know one another to find new opportunities to collaborate.
For example, one business owner client may have a sensitive employee compensation issue that another client who practices employment law can help resolve. Or a client facing new tax complexities could find it helpful to work with another client who owns a CPA firm.
The most effective financial advisor will proactively facilitate mutually beneficial introductions between clients so they can benefit from knowing each other, while recognizing how being the advisor’s clients made all of this possible in the first place.
Right now, to the extent that introductions between clients facilitated by the advisor happen, they are almost always very reactive, prompted by a specific request by the client.
Having a proactive system and a comprehensive strategy to serve as the introductions facilitator as part of a client network approach is the logical next step in the evolution of financial advice.
Build Your Network Step By Step
Start by getting to know each of your clients’ professions or businesses on a deeper level. By digging into the issues that clients face from all perspectives, advisors can provide relevant, timely and valuable advice or introductions to other clients in the advisor’s network to address specific needs.
On the other side of the coin, advisors must complete a thorough vetting of a service provider’s strategies and approach before recommending them, even if that provider is also a client.