Financial advisors should consider meeting clients for cocktails but not talking business, according to Ryan Sullivan, vice president and managing director of applied insights at Hartford Funds.
An alternative might be to invite clients out on a Saturday morning to walk their dogs or just to take a hike, Sullivan said in an interview. Or to volunteer for a community cause.
These are examples of activities advisors can plan to establish “outside the office” relationships that might develop into friendships with clients and generate feelings of loyalty in them.
“Clients today expect human-centric relationships with their advisors,” Sullivan said, adding that these activities take time and are sometimes more suited to wealthier clients—but that they are worth the investment. “Activities can also be done with mass affluent clients in groups.”
Many clients, as well as people in general, were suffering from feelings of isolation during the Covid-19 pandemic shutdown, which has made the formation of relationships and connections more valuable to them. Advisors need to enjoy the time they spend with clients, and the interactions need to be authentic, Sullivan added, though some events are still effective if held virtually.
“Advisors can try different activities, see what works, and then scale up,” he explained. “The goal is to get beyond the transactional relationship.”
If advisors begin to see clients as friends, they also need to maintain enough objectivity to have tough conversations about spending or investing when necessary.
Advisors can also deepen relationships by being a connector for their clients. “Can you help a client’s child find an internship or help a client’s mother find a good doctor? These types of efforts are above and beyond what clients expect, and it’s what friends do for each other,” he said.
Words are important in any conversation. To move beyond the professional setting, advisors should consider changing “Thanks for your business” to “Thanks for your trust,” or “Thanks for your friendship.”
Advisors need to tell clients that they appreciate spending time with them. “We often assume people know how we feel about them, but heartfelt compliments, when appropriate, ensure clients actually know,” Sullivan said.
It is important to know a client’s financial goals and how much money they may need for each, but it is even better to understand why they have set a particular goal, or what concerns they have about potentially not reaching it, Sullivan said.