Client Affairs

GUEST ARTICLE: How To Keep, Boost Client Trust During Shaky Market Times

John Michel, October 15, 2015


Client communication is a key service provided by wealth management professionals, especially during dramatic market shifts, explains John Michel of CircleBlack - a "wealth innovation" firm.

The recent volatility in the market, especially at the end of August, is a reminder of just how extreme and complex things can get for advisors and their clients.

Volatility is increasing and dramatic corrections are pushed along faster by algorithmic trading. Couple this with streaming news and information, and it is not surprising that many advisors find it hard to stay in front of their clients with timely communications.

The recent correction has served as a bit of a stress test for wealth managers, revealing the efficiency and effectiveness of their client communications systems. Managers with large numbers of clients, or particularly risk adverse clients, have found that their challenge is to deliver the personalized advice that their clients expect in a timely manner. During the financial crisis of 2008, many otherwise good advisors went dark which cost them in the form of lost client relationships. So the question in today’s market is how best to stay engaged with clients, even if you need to reach a large proportion of them in a short period of time.

The first step is to be proactive building a well-established client engagement program in advance of any correction. In today’s market, with robo advisors appealing to the tech-savvy investing crowd, it is crucial that advisors use the latest technology, such as mobile-based alerts and information.

Secondly, for an advisor to be efficient and manage a proactive communications program, there must be a certain amount of intelligent automation and client segmentation built into their communication strategy. All of this can and should be done ahead of any market correction. With the ability to segment clients based on holdings, strategy, interests etc., using CRM systems, advisors have a greater ability than ever before to customize communications to a large client base.

Tremendous advances in machine learning have also created the ability for even more customization. For example, with the right segmentation in place, advisors can forward compelling partner content to those clients who have demonstrated an interest in specific topics or ideas. Advisors can also use segmentation to create proprietary content designed to increase engagement with a specific group of clients. When these systems are set up, they can be used as the medium for additional communications, say on a day like August 24 when the Dow dropped 1,000 points, and clients are getting information from many competing sources.

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