The seismic market events of the last two months should be a stark reminder to investment management firms that having a well-conceived communication plan at the ready is essential if they want to differentiate themselves among anxious financial advisors.
Contact and Communication is Biggest Unmet Need of Advisors
According to a survey of financial advisors conducted by the Financial Times (FT), their biggest unmet need from investment management firms is contact and communication, specifically more timely responses to market events. While advisors always want more access to the fund manager, they would be satisfied with direct information provided through live communications.
Financial advisors understand that solid communication is the essence of relationships and trust. When they experience a breakdown of communication in one of their own professional relationships, it’s an immediate and telling indication of the quality of the relationship. It is important to note that the survey also revealed that most advisors work with an average of 11 to 17 investment firms, which should put any firm on notice that their advisor relationships are always at risk if their most important needs are not being met.
Strong client relationships built on effective communications can sustain a firm in a down year. To ensure your communications strategy is fully engaging your advisor clients, it should be based on these essentials.
Communicate relevance: Communications just for the sake of it is useless. Communications churned out as cookie-cutter clatter with little thought to the format, frequency, and content needs of the recipient is often viewed as “noise” by financial advisors. The key to maximizing the value of your content is to ensure that the right content is sent at the right time through the right channel.
Clear messaging: In times of market uncertainty, your message must be clear and honest, addressing any questions your clients may have. While it is not possible to plan ahead for future marketing events, you can create an archive of generic responses that can be tailored for specific events when they occur.
Personalize it: Not all clients are the same in how, when and what they want to receive as content. Ask your clients what they want in the way of communications, their frequency and how they want to receive it. To simplify the process, deliver it across multiple channels so the clients can control the flow and type of information they receive.
Automate: Create a digital pathway to engage clients. Use your CRM to send out emails with information on how your clients can receive an update on the market event. Some will want to receive a call while others would be happy to find a link to your website with the update waiting for them.
With information being disseminated 24/7 at digital speed ubiquitously across multiple channels, there is a clear expectation up and down the communication chain of timely and clarifying responses in times of market uncertainty or turmoil. The ability to meet that expectation is one of the main differentiators for IM firms, more so than investment performance according to the FT survey.
For smaller IM firms, it is an opportunity to level the playing field with larger firms. If your communication strategy is effective, a $3 billion firm can be held in the same high regard by advisors as a $300 billion firm.
Dan Sondhelm is CEO of Sondhelm Partners. He can be reached at 703-597-3863.