Most advisers pride themselves on their ability to solve complex financial problems. That’s a good thing.
But sometimes our ability to solve many client problems leads us to believe we can – or should – solve all client problems. And that, I’m afraid, is a fool’s game – although one we all play with the best intentions.
Earlier this year, the team at Absolute Engagement asked 1,000 high-net-worth clients to rate their level of concern across 13 different issues. We learned that clients are experiencing a complex cocktail of concerns, and while they benefit from the support of an adviser in uncovering those concerns, advisers don’t need to solve all those concerns.
The data uncovered a few home truths that are worth noting as you think about how to drive deeper engagement with your clients.
1. Concerns are natural
As part of the work we do with advisers, we often calculate a Concern Index for individual prospects and clients. The AE Concern Index provides a snapshot of how worried people are feeling, if that’s changing over time, and if there are differences within couples.
Using that same process at an industry level, we discovered that two thirds of clients scored as ‘moderate or high’ on the AE Concern Index, a composite score across all 13 potential concerns. Rising to the top were:
- Dealing with the rising costs of health/long-term care
- The impact of current market volatility on my ability to reach my long-term goals
- Personal or family health
- Ensuring my children make good financial decisions
- Ensuring my family is taken care of when I pass away
2. Wealth doesn’t solve all problems
Sufficient wealth has a way of ‘softening the blow’ of some concerns, but we cannot assume this is always the case. For example, the highest net worth clients are less concerned with the rising costs of health/long-term care and the impact of current market volatility on reaching their goals. However, they are equally, or more, concerned with ensuring their children make good financial decisions, feeling fulfilled in retirement and caring for elderly parents or family members.
3. There is a critical difference between ‘having’ concerns and ‘sharing’ concerns
While most clients have some concerns that keep them up at night, far fewer have shared those concerns with their adviser. Fully 40% of clients said they had not shared their concerns, and this creates both a risk and an opportunity. Those concerns are often tied to planning needs, yet clients may not see the connection. Further, lurking concerns may create stress and stop clients from making effective decisions or taking action on issues related to their financial futures.
4. A problem shared is a problem halved (and also drives referrals)
On an ongoing basis, Absolute Engagement tracks client self-confidence – we were delighted to see Nucleus’s recently UK Retirement Confidence Index doing the same. A high level of confidence, however, does not mean a client does not have concerns.
The big difference is whether concerns are shared. In our study, across every concern, clients with higher confidence were more likely to have shared their concerns with their adviser. The same held true for those who provided referrals.
5. Your job is not to ‘fix’ your clients
It’s clear that concerns are part of what makes us human. While advisers can support clients in increasing confidence, they cannot eliminate concerns entirely, nor should they try. Rather they can provide prospects and clients with a safe place to identify, understand and articulate their concerns in order to align back to the plan.
Your action plan
The steps toward embracing concerns to drive engagement seem simple and natural, if we can just shake the need to fix everything.
- Provide clients with an easy way to identify and share their concerns.
- Allow them to see that others share their concerns and that they are real (even if their financial plan suggests they shouldn’t be)
- Give clients the space to discuss or examine those concerns.
- Provide them with examples of how their plan will mitigate those concerns (but not necessarily eliminate them).
Driving engagement with clients is not always that different from the way in which we build relationship with friends and family. We’re there for them, even if we don’t have all the answers. And that’s ok.
