The art of client engagement


With revenue sources and established business models under threat, it is becoming more important than ever for advice practices to build trusted and engaged relationships with their clients.

Articulating the value of advice

As we enter a new era of financial advice, practices can no longer rely on the revenue provided by legacy clients. The greatest challenge in this new environment is how to create a client base that is active, engaged and willing to opt in to services year after year. Many practices are already rising to this challenge by establishing ongoing service models and adjusting their methodology to ensure all clients can be serviced profitably. But this is no easy task while the industry is surrounded by negative commentary. So how can you build trust with your clients and articulate the value of advice?

To help answer that question, Investment Trends analysed data from a comprehensive quantitative survey of 345 practices across the country1 scoring each practice on a range of performance indicators, then analysing the features that make top-scoring practices stand out. The research found that one of the key areas shared by the top-scoring practices was a resolute focus on the client experience and a willingness to pursue new ways to engage clients in the advice process. Top scoring practices are those scoring in the top 20% of those surveyed.

The Investment Trends research shows that top-scoring practices excel at attracting new clients, but more importantly, we believe they have great processes in place that help them engage with their existing clients. They are more likely than other segments to use digital methods of engagement with their clients, such as providing clients with online access to view their financial position (49% versus 33% for both middle-scoring practices and low-scoring practices), sending regular email newsletters (63% versus 54% and 57%) and using interactive modelling in client meetings (32% versus 26% and 14%).

And we believe, by building ongoing trusted relationships with their clients, these practices are setting themselves up for success as an emerging practice of the future.

A discussion about client engagement

To find out more about how advisers can form a trusted and ongoing relationship with their clients, we spoke to the principals of three advice practices who outline how they focus on client engagement.

Each participant has found unique ways to engage clients in the advice process: Eleanor Dartnall, Principal of Focus Wealth Advisers²works with the client to build their own strategy. James Wortley, Principal of Enlightened Financial Solutions, has replaced individual adviser targets in his practice with team targets so everyone works together for the benefit of their clients. And Suzanne Haddan, Managing Director and Representative of BFG, has designed an on-boarding process that gets the best possible value out of the first appointment with the client.

Q. How do you engage with clients right from the start?

Eleanor: Our purpose is to educate our clients so they ‘own’ the decisions made as they relate to their investments. The starting point was to use a risk profiling tool that really works; this took shape as a workbook that covers all the aspects of investing and the risks associated with the different asset classes and market sectors. The result is a client who decides the sum they wish to invest in each asset class. As an adviser you know when you have captured the interest of your clients; this ‘rejuvenated’ client/adviser journey has become the source of all of our new business. Our referrals, which were consistently less than 5% (new business coming from marketing, seminars and workshops) is now at a consistent referral base in excess of 80% each year. 

Placing the knowledge and the decision making in the client’s hands through education, while time consuming, is rewarding. Today we often hear a new client state “I had no idea I would learn so much and that I would not just be handing over information. I have to tell someone about this”.

Suzanne: We have a very clear onboarding process and we send clients a lot of information upfront to make them feel comfortable. We also discuss fees early in the process so they're not thinking, "Just get to money. What's all this going to cost?" We're clear that by the end of their first appointment, the client should have a fixed fee quoted and a clear understanding of what’s involved. So we set up those expectations straight away.

James: We build a relationship with the client right from the initial contact, and that relationship is with the entire practice. We always have two advisers in every client interview and review, because two heads are better than one and we have a range of expertise within the business. So we make sure we get a lot of information upfront from the client so we can work out which two advisers will best suit that particular client’s personality.

The practice of the future takes the time to develop strong relationships with clients.

Q. Do you spend more time on acquisition or retention?

James: Our business is in a growth phase and everything we’ve been doing over the last two years is now starting to pay off with a lot of new business. We’ve come to a point where we need to make sure we have enough advisers to support that new business. There is a balance between acquisition and retention, and our priorities are always directed to our existing clients.

Suzanne: We have sufficient, solid flow of quality referrals so our focus at BFG is our existing clients, rather than new. We don’t want to take on too many clients because it could affect how we serve our existing clients.

Eleanor: As we have a high volume of referred clients, we have the benefit of more time to spend on delivering to our existing clients and this, in turn, converts to retention. As markets become more volatile, our clients want and need to hear from us more often. This tends to be our biggest time spend after onboarding new clients.

The practice of the future recognises that spending time with existing clients is more valuable than searching for prospects.

Q. How do you ensure prospects are the right fit for your business?

Eleanor: We built our client base slowly so we could spend the time needed to reflect upon what each client was seeking and whether we were delivering to meet their needs. I speak to all prospects at the time of their first inbound call. The purpose of the conversation is to ascertain whether they are a fit for our business and whether we have the service they are looking for.  Because of this pre-qualifying conversation, 100% of those who do attend a first appointment are converted to clients.

Suzanne: I’m a big believer in mutual obligation: we have an obligation to them as a client and they have obligations to us as their professional team. Getting clients to do work before they come in really helps get value out of that first appointment – which is at our cost, not theirs. We want to make sure that first appointment progresses through a good process.

James: We find out straight away what the person has and what they’re hoping to achieve. If we’re not the right fit for them, we might refer them to another adviser who we think can do a better job for them than what we can. Or we might help the person with something specific on an hourly basis, even if they’re not going to become one of our core clients.

The practice of the future ensures every client can be serviced profitably and is a good fit for the practice’s business model.

Q. Have you noticed a change in the way clients engage with their advice practice?

Suzanne: We're spending more time on the clients' goals, their aspirations, their needs, their wants, and how we think they can achieve them, and how we can assist them in the allocation of their resources to achieve their goals, whatever they are. We’re adding value through strategy and structure, especially to clients with a little more complication in their affairs.

James: Clients want our help with cashflow, goals, business advice, business succession. They want leadership and for us to make sure they're accountable for their business goals as well as personal financial goals. And we can do that because we have plenty of experience and we're running our own business as well.

Eleanor: My job is to be the teacher upfront and then the ongoing coach. As I stated earlier, our aim is to provide the client with enough knowledge, so that they become the decision maker. We have an older client base/target market, so engagement with each client is vital. We need to be able to identify with the DNA of the money we are looking at, it is a different emotional dynamic. Our advice document has to be short, digestible and focused on the client alone. To achieve this outcome, we unbundled our SOA document, the generic information about profiles, platforms, disclaimers and more, are in a separate printed booklet, the SOA for the client has no information that is not relevant to their specific advice. The result is a ready understanding and buy-in to the recommendations made.

The practice of the future is the client’s confidant and counsellor.

Q. How often do you engage with your clients?

James: We make sure we have touchpoints at least 10–12 times a year, so we contact our clients almost on a month-to-month basis. It usually is either a face-to-face meeting or a phone call to see how our clients are doing. We’re also building up a concierge service for our clients where we help our clients get better deals for big ticket purchases.

Suzanne: We don’t see client contact as a burden; we see it as an opportunity and an essential part of our service. We position ourselves as the centre of our clients’ financial services world, so we can represent them with all the different participants in the financial services process – such as product providers, the tax office, Centrelink and solicitors. We want our clients to use us as their touchpoint for anything significant that happens in their life. I don’t believe in time billing, because it discourages contact from clients.

Eleanor: We have constant contact with all of our clients, apart from the regular review program. Whether it is emails, phone calls a quick fireside chat, a formal letter, our newsletter or my blogs, our clients feel they are part of our family. This is important because, if it is needed, we receive an early indication that the client is very happy or, that they would like something different. We can quickly amend our service to meet the clients’ changing needs. This also comes down to our retention policy.

Once upon a time, it used to be the bank manager who knew all about the client, their families, their joys and fears; today it is more likely to be their financial adviser who understands all these elements of each client’s journey, so our need to be an empathetic listener is an important part of our adviser profile. 

The practice of the future creates an ongoing dialogue with clients and cuts through the information overload.

1. The findings in the BT Financial Practice of the Future Report are based on 345 valid responses to the 2018 Investment Trends Planner Business Model Report. This quantitative survey was conducted in May 2018 and published in June 2018.

To identify the characteristics of successful practices, BT asked Investment Trends to assign each of these 345 respondents a score between 0 and 10 for the following criteria:

  •  Revenue turnover per planner
  • Number of new clients acquired in the last 12 months
  • Profitability growth (adjusted for the age of the practice)

The three scores for each respondent were added together to obtain a total score, which was then ranked. This gave three segments: 73 high-scoring practices (top 20%), 201 middle-scoring practices (middle 60%) and 71 low-scoring practices (bottom 20%).

2. Focus Wealth Advisers Pty Ltd is a Corporate Authorised Representative of Magnitude Group Pty Ltd ABN 54 086 266 202 AFSL 221557 (Magnitude). Magnitude is a member of the Westpac Group.

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