Listening to clients boosts financial planning success

Most financial advisors agree that listening to their client’s needs is a critical starting point for customizing financial plans. However, clients often feel that their advisors do not provide personalized attention.

The 2020 Global Survey of Financial Professionals by Natixis Investment Managers found half of those surveyed said getting to know clients personally is a significant factor in their success. Yet the same survey listed the top reasons clients leave firms are advisors’ failure to listen to client needs (60%) and communications shortcomings (58%). Similarly, Qualtric’s Financial Advisor Client Experience Research Report found “lack of personalized attention” was the second most common reason clients switch advisors – and the top reason millennials change.

“Customization does not mean simply relying solely on our prowess to build a portfolio,” said Tim Mitrovich, CEO and chief investment officer at Ten Capital Wealth Management in Spokane, Washington. “It means really listening to the client’s story and helping them build their financial plan. It comes from the attention and education we put into helping the client understand what fits them best.”

TEN Capital has a formal process they walk clients through in order to know them and their goals better. The defined process goes beyond merely listening to help both advisors and clients identify desired results. One of the largest industry gaps, Mitrovich said, is that many firms fail to help clients fully flesh out what they want to achieve and what obstacles lie ahead. By identifying those factors, his team can help clients understand how each personalized financial plan addresses their individual needs. The firm then communicates with clients on an ongoing basis on their progress.

“Internally, we talk about all the time about the 3 P’s: purpose, plan, and portfolio,” he added. “We can't build you a great portfolio without knowing where you want to go and how we're going to get you there.”

TEN Capital favors clients who value relationships with professionals who can help address the challenges they need to overcome. With factors such as performance and fees fairly stated across the industry, Mitrovich said, the main opportunity advisors have to provide added value is through their personal relationships with clients.

“First comes the destination, and next comes the plan,” he continued. “Then their portfolio becomes the gasoline to get the car down the road to that destination. Certainly that relates to performance and fees. But more importantly, it relates to clients who understand the importance of partnership, and of being thoughtful and intentional in laying out plans.”

Depending on client needs and assets, TEN Capital offers a menu of services it can scale. Those range from digital support to an ultra-high-net-worth solution with more frequent personal advisor-client contact.

Financial education is huge factor in each approach, Mitrovich noted, with the goal of empowering clients. Beyond individual client meetings, the firm distributes weekly commentaries through text and video formats, plus provides social engagements throughout the year that include educational opportunities. TEN Capital’s process also focuses on relationship marketing through special events – typically in-person, but currently through virtual connections. They offer a variety of opportunities for clients to mingle in small social settings with each other and their advisors. Clients have shared that they feel more comfortable discussing finances and their personal goals with an advisor with whom they have established a personal relationship.

“We help them understand that building wealth is much more than the S&P 500 return, which is what many people focus on,” he added. “We've developed a communication system that uses everyday speech. We talk in terms they would use with a friend over a glass of wine – not classic market-speak about rates of return or risk levels. If they ask us how things are going, they don't care about the standard deviation of the portfolio. They want to know if they can still help their grandkids.”

For more information on TEN Capital Wealth Advisors, visit tencapital.com