Segmentation and Service

In our view, the three keys to high performance in any profession are talent, skills, and capacity. You can have a remarkably talented and experienced team, but if they're too busy trying to serve too many clients, your service will suffer. In fact, according to surly associates, the leading challenge to financial professional productivity is serving too many non-ideal clients. The solution to this is quite simple, it's what we like to call the four S's, which are segment, streamline, stratify, and systematize. The first step in this process is to segment your clients. We'd ask you to think about those clients who leave you feeling energized, excited, positive, the ones you just love working with. Now, if you were to take a step back and try to define the characteristics of these clients, we'd ask you to consider the following criteria, both quantitatively and qualitatively. First up, current revenue. This one's quite simple. How much current revenue do these clients generate for your business? Next, we'd ask you to think about the future potential revenue. This is designed to help you project the lifetime value of this client. This could include their asset growth potential and the client's future income potential. Always keep in mind that today's intern could become tomorrow's chief of surgery. Next up, time consumption. Now we're talking about the amount of time clients take relative to the income that they generate for your practice. Then we'd ask you to assess their attitude, which is the attitude towards working with you. How likely are they to follow your advice? How coachable are these individuals? And finally, their center of influence. How often do they refer qualified prospects to you in a way that helps you grow your business? This framework provides a quantitative assessment of the client, along with the qualitative elements that come along with managing relationships and their long-term sustainability for you and your business.

The next step is to streamline your clientele. Consider that, in our industry, we're always talking about assets under management, but this only tells a part of the story. The truth is that we don't just manage assets, we manage client relationships. And the wealthier these clients get, the more complex their financial needs become. Now, we'd asked you to consider that the more clients we attempt to manage, the more infrastructure we need to build, the more people we may need to hire or onboard. This increases our risk of losing focus on the most valuable clients we currently serve, and it also compresses our capacity to grow our business. This impacts our work-life balance, and it compresses our profit margins. On the other hand, by reducing the number of clients we serve, we stand to increase our team's capacity to execute. We can also refocus our time and energy on the right clients, which can enhance our client service offering and experiences. And ultimately through all of this, we're expanding our wealth management capabilities, and it all starts with rightsizing your clientele.

You know when it comes to client service, we believe that there are four categories; there's communication, education, recognition, and the overall experience. The VIP forum, it's an industry think tank based in Washington DC. They found that high net worth clients, they want to be contacted proactively 12 times a year. Yup, 12. You can call them by phone, you can meet them by zoom or in person live, but 12 that's the magic number. Communication should also be predictable and meeting your guests live or in person twice per year, that should be enough, that's plenty. One of the greatest gifts though that you can give your clients is education. So this takes the form of providing context for their wealth which comes in different categories. Four of them; philosophical, historical, allegorical, and novel. And they're all wrapped within a compelling and innovative approach. So number one, philosophical. Help clients understand the philosophical why behind the what. Next you've heard the adage, those who do not study history are doomed to repeat it? You can help clients understand current markets by giving them that historical perspective. And don't be afraid to use those analogies, parables and allegories to help bring concepts to life. Because remember, we are a left-brain industry talking to a right-brain client. And finally, we believe you could separate yourself from the competition by doing things differently. Don't do what everyone else is doing. Stand out from the crowd, be different. So, when it comes to recognizing your clients, we believe that you should avoid the generic wine, the flowers and the candy. Instead, try to do something extraordinary. Send that James Bond fan a bottle of the famous Aston Martin he drives in the early films. Send the Yankees fan a signed ball to thank them for a referral or a client introduction. The key here is to move from the common to the exceptional. The last category of client service is the overall experience. Try to look at everything from the client's perspective. Look at what they see, hear, and feel. And ask yourself if the caliber and quality of your practice is being reflected at every step. If the answer is yes, keep doing what you're doing, but if the answer is no, consider making some changes.

With client service, it can be a good idea to create a stratified client service plan. For example, you could offer platinum, gold, and silver levels of service. So platinum service for the top 10% of your clients, gold service for the next 15%, and silver for all the rest. When you're crafting your client service model, there are four categories to consider here, communication, education, recognition, and then anything that doesn't fit into those categories we consider part of the quote, overall experience. Perhaps for your platinum clients, you offer a family retreat and family education series. Or another idea, perhaps you offer them more in-person meetings and the most customized high-end solutions. So, just refer to our service and segmentation toolkit for more ideas, and also to begin crafting your own stratified client service worksheet.

When it comes to communicating with your clients, you can systematize the process with a proactive pod-based service model. We have found that one of the top drivers of client satisfaction is the frequency and quality of contacts. The VIP forum, it's an industry think tank based in Washington, DC. They found that the optimal number of contacts for high net worth clients, it's 12 times per year. And that's through a combination of in-person or virtual meetings, phone conversations, and, or even events that you may host. For large financial teams that serve high net worth clients with complex challenges, we've designed a pod based communication structure. This structure, it deploys managing partners to work with your platinum clients, senior partners, with gold level clients, and then junior partners with the silver level clients. Each with a prescribed call cycle for the calendar year and a list of potential topics designed to help drive the conversations. Many examples of conversation topics can be found in the segmentation and service toolkit. We recommend rotating topics and personnel in order to leverage, showcase, and allow your team members to forge their own relationships with the clients. And regardless of what you are speaking to the client about, we believe that you should always use the relationship equity conversation model, which includes hearing from the client, monitoring for client changes, agreeing on agenda items, and setting expectations for follow-up. Remember the cornerstone of any healthy relationship is open and consistent communication.

In the medical community, there's a term called the golden hour. And it's used to refer to instances where a patient who is experiencing a cardiac problem can get to a doctor. And if they can get to the doctor in roughly an hour, in many cases, they're able to stop and sometimes even completely reverse the cardiac problem that they're having. We think that this is an apt analogy for a challenge that many financial professionals face and that you might be facing right now. Because the research tells us that 75% of financial professionals stand the risk of losing a high value client over the period of any given year. And so being able to understand that risk, to know who in your book might be in danger of leaving, to understand very specifically who your anchor clients are, what you can do to keep them satisfied and in check, and then mitigate the risk of their departure is really the key to keeping them from leaving. So golden hour provides you with a series of research-based language of script templates that you can use to customize for your own practice. And a reliable kind of consistent process so that you can maintain regular contact with these clients over time. If you're interested in learning more about the golden hour, please reach out to your Invesco consultant.

Thank you for your time. I hope you found it informative. If you have any questions or for more information on this or other programs from Invesco Global Consulting, please reach out to your senior advisor consultant. Thank you.