Confidence = Loyalty + Referrals

by Kirk Hulett

Cementing the loyalty of your clients should be one of the most important goals of your financial planning practice. Competition for the best clients is fierce. Loyalty is a product of both your actions as a planner and how those actions influence your clients’ perception of you. Your clients’ perception of your personal confidence and your knowledge as a planner strongly influences their loyalty and retention.

There are specific actions you can take to reinforce the perception you are a knowledgeable professional. Most obvious, is to earn a designation, such as the CFP®. Note your designation on your business cards, stationery and in public advertisements and communications. It is also important to communicate your past educational achievements, such as advanced degrees and specialized training in your field. As a professional, you should describe your on-going professional development activities. Did you attend the annual FPA conference? Tell your clients about it in a newsletter or on your web site. Do you have annual continuing education requirements for your designations or licenses? Tell your clients about it. You want to know your doctor is in the know on the latest medical treatments. Just like those professionals, your clients want to know how you have sharpened your financial planning skills.

Engaging in educational initiatives for your clients will also reinforce the perception that you are a knowledgeable planner. For example, host a “lunch-and-learn” session. Invite an expert speaker on financial topics. In advance, work with the speaker to prepare a five minute introduction and a five minute conclusion that you will present. The purpose of the introduction is to show you too are knowledgeable on the topic the speaker will address. In your concluding remarks, focus on specific action steps your clients can take based on the information presented by the expert. Placing yourself at the same podium as the expert will cast his or her reflected glory onto you.

Providing your clients consistent written communication on financial topics is an effective way to reinforce your knowledge. Have a systematic communication campaign that touches each client at least once a month with useful and relevant information. Perhaps a weekly economic commentary sent via e-mail or a monthly newsletter on personal finance. You don’t have to create these communications yourself. There are dozens of vendors who provide these publications for a monthly subscription fee. Along the same lines, it is very important that you communicate to your clients about the impact of important or unexpected news events. Clients want to hear from you at these times so that they know you are thinking of them and so they know you are considering how these events may or may not affect their financial plan.

Confidence is a state of mind for both you and your clients. Your clients want you to be confident, so in turn, they can be confident about your recommendations and actions. You can build confidence through a myriad of behaviors. Using active listening techniques with your clients is important to build confidence. When in client meetings, maintain appropriate eye contact while the client speaks. Confirm your understanding of what the client is saying by rephrasing and asking if you got it right. Ask for both thoughts and feelings. When clients talk on an emotional level, you should show empathy by replying with expressions of understanding.

Confidence is built by ensuring the clients have a consistent and professional experience with your practice. Consistency is built through dozens of little things such as always answering the phone with the same greeting and welcoming a client by name when they arrive. The appearance of your office also creates a strong impression of confidence. Hire an interior decorator that specializes in professional offices. Ask them to quote you an hourly rate for consulting with you.

When your clients believe you are a confident and knowledgeable planner, you will build strong client loyalty leading to higher client retention and increased referrals.