Author: Leighton Langan

A crucial component of client success is ensuring they are fully engaged in the financial planning and investment process.

Unlike other industries, a client engagement strategy is more nuanced and hinges on building a strong, often personal, client relationship.

To get a better idea of what your advisory firm can do to boost engagement and client retention, let’s better define what engagement looks like. Then, we can dig into actionable examples your firm can start using today.

What does client engagement look like?

Your clients don’t need to exemplify every engagement level on this list. However, these are common signs that you have engaged clients. These traits or actions highlight how involved a client is in their success.

It’s also important to note that levels of engagement will change based on the client’s journey. In the beginning, clients may be revving to get started. But gradually, the interest may decrease, especially over the first two years.

Present During Planning

Engaging clients begins at the very start of the process and carries over from year to year. The initial meeting may appear to bolster client engagement, but the decline can be steep once you hash out initial goals.

When a client is engaged, they are fully present during the planning sessions. They not only pay attention to your explanations and ask questions, but they also are quick to provide details about their financial wellness and expectations. However, once these items are settled, it’s easy for a client to fall into complacency. This can lower client satisfaction, as it becomes difficult for the advisor to make changes to the financial plan or make recommendations without knowing the client’s current state.

As a result, you need ways to keep the client aware of your plans and want to participate. Ensuring that their input is essential to client success encourages them to remain engaged.

Taking Advice

Another headache for many advisors is ensuring that they take your advice. You can detail all the investment best practices and products, but if your client doesn’t act on them, they will have a lower client experience.

While you can’t force someone to take action, it’s important to note that this issue is strongly linked to client engagement. A highly engaged client is eager to take the initiative and follow your recommendations. They respond in a reasonable amount of time and may even keep you updated on the results.

Meanwhile, disengaged client doesn’t see action on their part as an aspect of client success. They may agree to take your advice but then fail to do so.

Asking Questions

Another example of client engagement is whether or not your client asks questions. You may feel that they trust you if a client doesn’t ask questions. But that’s not always the case.

Engaged clients want to know what’s going on with their portfolio and how you’re reacting to market shifts. Not every client will ask the same amount of questions, but any proactive interaction suggests that your client is invested in the experience and their success.

As you respond to clients and raise their confidence, you build client loyalty and boost retention. You also keep that engagement going.

Responding to Communications

Depending on your marketing and client service model, you may send regular check-ins via emails, phone calls, or texts.

Clients responding to your emails can indicate engagement in the process. Even though clients don’t need to regularly check their portfolios or manage investments, many appreciate regular communications. This isn’t just follow-up reminders but news about the market, your approach, or even life updates.

Creative client engagement examples from advisory firms

Personalized Content: Wealth Health, LLC

A pillar of superior client experience (and engagement) is personalization. Relevant content is more likely to be read, and clients will appreciate it.

Wealth Health uses a personalized content strategy for both client engagement and acquisition. Rather than a single blog, Wealth Health offers several content categories based on client interest. For example, investors can choose to receive content about retirement, tax, estate planning, or all of the above.

Newsletters: Performance Wealth

A common engagement model is frequent email communication. However, these messages can pile up and frustrate clients who lose track of them, accidentally delete them, or don’t even see the message because it’s in their spam folder. Furthermore, retired clients may prefer reading a traditional newsletter with graphs, economic overviews, and other long-form content.

Performance Wealth allows potential and existing clients to download prior newsletters from their website. This client engagement strategy enables clients to always be able to find relevant and in-depth financial updates and showcase their authority to new clients. Building client loyalty can begin before they even schedule a call – and this trust translates into more engaged clients.

Videos: John Lindquist, CPA

Not all clients learn the same way. Therefore, when you’re educating your client about investments, financial planning, or another service, it can help to have a few different approaches. Videos can offer another level of engagement for many clients. These can be customized to specific clients, but more often, it’s helpful to have general videos about market news, regulations, or other topics.

Advisor John Lindquist, CPA offers an entire video section on his website that covers various topics, from how to prepare for retirement to social security. Most of these videos aren’t long, either – 2-3 minutes can suffice.

Use Visuals: Bedel Financial

Engaged clients understand the rationale behind your recommendations. However, since financial decisions can be complex, successfully describing your decisions in layman’s terms can be challenging. This is where visuals come in.

There are several ways to simplify financial data and regulations. Graphs, charts, and portfolio-market comparisons all support a better client experience. Infographics can also do a solid job of educating a potential or existing client. For example, Bedel Financial showcases infographics on their Client Resources page that simplify topics like account contribution limits, tax benefits, and education savings.

The best part is that it’s easy to reuse these examples as part of client acquisition or brand awareness. A potential client may see these infographics in general newsletters, social media, or even as visual aids during a webinar.

Worksheets: Summit Financial

Another tool to boost client interaction is worksheets. In the past, advisory firms have listed PDF risk assessment questionnaires on their website. But as this process gets more interactive and streamlined, some advisory firms are offering supplemental resources.

Summit Financial provides an array of worksheets for wealth management and investment advisory clients. These include a cash flow worksheet, data gathering checklist, fraud protection tips, and market returns during election years. Clients may choose to fill out these forms on their own or work together with an advisor. At the same time, potential clients may use these forms and decide they want to work with an advisor to navigate them.

This effective client engagement strategy encourages clients to take control of their finances without forcing them to do the heavy lifting of organization and research.

6 Ways to Boost Client Engagement

1. Personalized Communication

One of the struggles of scaling client communication is using general, mass-market language. It’s difficult to foster client loyalty if the client feels you are not focused on them. And without that fundamental trust, client churn rises.

Clients know that you’re sending an email to your entire list – but they don’t want to feel that way. Simple, small efforts at personalization can build trust and, as a result, boost your retention rate. Furthermore, this approach is no longer time-consuming. Automation enables advisors to rapidly personalize messages.

You may even take it a step further. For example, you could segment your client list based on demographics and then write email content based on their specific interests. This can be as easy as sending a relevant news article that your clients may find valuable.

2. Regular Check-ins

Client communication is essential. However, it can be a time-consuming activity, and manual follow-ups are hardly scalable. That said, failing to check in regularly not only disengages clients, but can increase churn. It also makes it difficult to measure how invested your clients are in the process—although we can assume they aren’t involved unless they are proactive.

Ideally, your advisors should be able to easily get a pulse on client sentiment towards the firm and the market. One way to do this is through automated surveys. For example, Nitrogen’s check-up feature sends two simple questions: One about how they feel about the market and one about their financial future. Clients only have to respond positively or negatively. These answers, combined with the client’s risk tolerance, make it a cinch to prioritize client communications and maintain engagement.

3. Easy Explanations

A common sign of client disengagement is not acting upon advice, showing literal interest, or taking a long time to provide answers. There are several potential reasons for this behavior, but one of the most common is a lack of understanding.

Many clients can’t easily conceptualize financial plans and the math behind them. Even using a static spreadsheet to show income every year for forty or fifty years may be enough to make their eyes glaze over.

Finding ways to simplify explanations and visual representations can help re-engage clients. Not only will they better understand you during a meeting, but they may better retain the information. This, in turn, builds trust and encourages clients to take part in the process.

4. Family Meetings

Unless you are working with a family of one, your clients most likely have parents, spouses, and children who will be affected by their financial plans. Including family members in advisory meetings offers another level of transparency and fosters important conversations. These touchstone meetings may promote additional engagement, either through more meetings, questions, or accountability for promptly providing information.

5. Focus on Long-term Goals

Frequent market shifts can stress clients and cause their confidence to waver. If this happens, they may urgently request meetings and portfolio details. Failing to quell stressors can cause clients to lose trust and begin to disengage.

While it’s important to review short-term market shifts, keeping focused on the long-term goals can help you maintain positive engagement.

Even during fairly peaceful periods or bull markets, focusing on long-term goals and portfolio growth can also encourage clients to update you on life events and financial changes.

6. Go beyond the numbers

Many clients hire an advisor with the belief that they’ll only be discussing money. And perhaps that’s true of some client relationships. However, advisors often better engage clients and understand their needs when looking beyond budgets and savings goals. Learning who your client is as a person enables you to better anticipate their reactions to the market, recognize opportunities, and build trust.

When you focus on the individual rather than just the portfolio, you become a trusted part of the client’s team.

Tap into More Client Engagement Strategies

Discovering an engagement model that works for you is more than quickly implementing these examples. Ideally, you should use a client engagement strategy that your clients would enjoy.

To learn more about fostering successful client engagement, check out our guide on client engagement strategies.

Once you have a new client, their expectations change, and yours should, too. Naturally, a client is engaged in the beginning – after all, they’ve been evaluating your services and comparing them to others.

However, inspiring client loyalty and strengthening retention is often challenging for both new and established advisors. Furthermore, accurately measuring client retention can create more questions. Poorly integrating client surveys or other tools to gauge satisfaction can confuse not only your clients but also your advisors, thus creating friction in the overall experience.

How to measure client retention

Retention for financial advisors doesn’t necessarily work the same as with other industries. While client satisfaction is paramount, clients aren’t purchasing various products, and you shouldn’t have to lure them into your practice. In an ideal world, your new client stays with you year by year as you help them navigate complex financial and life decisions.

For that reason, the most obvious way to review your client retention rate is to find the average length of time a client spends with your firm. But that’s a reactive step, and it doesn’t necessarily tell you much about why they’re leaving.

Of course, compiling client data manually can be a tedious task. Luckily, your team can pull information to calculate client loyalty through a variety of tools. Your CRM and growth platform, among others, tend to offer insights. You can then use the information to determine client retention directly or use the numbers to calculate key metrics yourself.

Three of the main client retention metrics include:

1. Client retention rate: This is the percentage of clients you retain over a given time period. To calculate this, you would use the following formula:Client retention rate: ((clients at the end of the period – new clients ) / number of clients at the beginning of the period) x 100
2. Client retention cost: This calculation highlights how much it costs to retain a client. This can be used to better budget for your retention activities. To find your client retention cost:Client retention cost = cost related to client retention during a period / number of clients
3. Client satisfaction score: If you want a qualitative way to measure client satisfaction, this simple formula makes it easy to understand where you stand. The calculation is:Client satisfaction score = satisfied clients / total answers

However, it becomes easier to measure retention when you have client service and engagement tools that offer insights into client psychology and track client responses. At the same time, numbers don’t necessarily tell the whole story. You’ll also want to consider questions like:

• How often do clients contact you?
• How quickly do they respond to your communications (if they respond at all)?
• Do they update you on changes to their financial goals or unexpected life events?
• Do they implement recommendations?

Proven Retention Strategies for Financial Advisors

Client success – essentially performance – isn’t necessarily the main barometer for most clients. In fact, studies show that client churn is largely linked to a lack of communication or a poor client relationship.

Below, we’ve pulled together top, easy-to-implement strategies that foster loyal clients and improve your retention rate.

Plan Communication

A surefire way to improve the client experience is to map your vision for client communications. Just as with any relationship, regular and relevant communication is important. Assuming that following up with clients will work itself out can cause bottlenecks and make it difficult to manage engagement.

As a result, you’ll want to map out how you will communicate with clients. Understanding the communication flow for both a new client and an existing client empowers you and your advisors to be proactive when it comes to your clients’ needs.

This can include topics such as:

• How you plan to communicate (SMS, email, phone calls, or all of the above)
• How often do you plan to follow up with clients
• What steps might you take during chaotic periods when many clients are concerned about their portfolios
• How to scale communications as you grow your business

Set Clear Expectations

Another key aspect is setting clear expectations and responsibilities. New clients may assume that all they have to do is give you their account information, and you’ll do the rest.

However, client success hinges on them being involved in the planning and investment process. Furthermore, even if clients believe they are okay handing off their responsibilities, any drop in value, no matter how short-lived, will impact their client satisfaction harder. However, if they are collaborating with you and understand their role and your value as an advisor, it will be easier to weather the storm.

Position Your Services

A financial advisor is more than short-term portfolio performance. However, many clients may not be initially aware of the width and depth of what you offer. This can lead to client churn and low client loyalty, as they are not fully aware of your value.

It’s important to be clear in the beginning that you want to do more than grow, preserve, and manage their wealth. Your end objective is to help your clients meet their long-term goals.

Build Real Relationships

One of the best ways to ensure client churn is to make client interactions only about their portfolio. Money touches all of life’s milestones – career choices, relocations, children, education, marriage, retirement, and leaving a legacy. It’s an emotional endeavor, and solid client experience takes this into account.

Take time to get to know your clients on a personal level. You can do this by setting up family meetings, sending them follow-ups about their life and not their portfolio, and showing them appreciation through events, birthday cards, and other strategies.

Upgrade Your Technology

Finally, it’s impossible to accurately manage your current clients, scale your operations, or measure client retention without the right tools. Improving your technology enables you to better communicate with clients, assess their risk tolerance, proactively check in on their market sentiment, and get client feedback. Modern technology also supports your advisors and allows them to work more efficiently without worrying about potential compliance issues or wasting time on manual tasks.

More Tips on Boosting Client Retention

Client engagement is one of the best indicators of how likely you are to retain a client—using the above strategies, measuring your retention rate, and linking that to how active your clients offers a full picture of how effective your operations are.

To learn more about client engagement, what it is, and how it can help your firm, check out our comprehensive set of client engagement strategies.

What does it take for advisory firms to reach hyper-growth, catapulting themselves to new levels of business success? 

There are an incredible number of strategies, tactics, and opinions on how to best grow your business, but we want to draw your attention to one simple, practical way to ensure that your growth strategy is always evergreen: Focus on your client engagement strategies. 

If you want to become a hyper-growth advisory firm, there is no better way than to purposefully and consistently engage with existing clients. In the 2023 Nitrogen Growth Survey, we discovered a few key findings about what high-growth advisory firms do differently than slow-growth firms — and, perhaps unsurprisingly, they come back to solid client communication principles. 

Firms classified as hyper-growth:

• Incorporate more automated communications into their practice, ensuring that they frequently show up and add value to different segments of clients with targeted, valuable content.
• Feel more prepared for the Generational Wealth Transfer than slow-growth firms do, also due in part to having more advanced client communication techniques.
• Implement proposal generation software and lead-conversion tools that better equip them to convert leads into meetings, meetings into clients, and clients into referral champions with defined processes running flawlessly through their technology systems.

Throughout the rest of this article, we’ll dive deeper into effective client engagement strategies that you can implement in your firm, as well as identify the role of technology in a digital engagement strategy.

Table of Contents

• 8 Effective Strategies to Increase Client Engagement
• How to Automate Your Client Engagement
• How to Build a Client Engagement Strategy with Nitrogen’s Risk Number
• Connecting Client Engagement Strategies to Ongoing Portfolio Management
• What the 2023 Nitrogen Advisor Growth Survey Reveals About Client Engagement

8 Effective Strategies to Increase Client Engagement

The path to hyper-growth begins with understanding how to increase client engagement. To that end, identify how many of these eight types of client engagement your firm is (or isn’t) already using – and then implement any tactics that you aren’t effectively doing already.

1. Timely communication

Look first at how often you’re communicating with your clients as a whole. This doesn’t mean how many review meetings you hold each year – but rather, the totality of communication. 

If you aren’t communicating timely, relevant information to clients at least monthly, then this is the first place to start when attempting to increase client engagement.

2. Regular meetings

Your actual meeting cadence will vary depending on the services you offer, the complexity of the clients you work with, and what’s occurring in the world that’s impacting investments. However, it’s generally accepted that personal meetings with most clients should occur 2-3 times per year – and annually, at the bare minimum.

3. Managing expectations through risk

Getting clients engaged in their investment performance, especially if they are naturally delegators, can be a balancing act for even the best financial professional. But managing expectations and communicating why it’s important to stay the course during turbulent conditions is essential for keeping clients engaged. 

One of the most effective ways to manage expectations is by helping clients to understand their personal level of risk tolerance and then using that knowledge as a recurring conversation point to build trust in both an advisor and the agreed-upon plan.

4. Personalizing the client experience

There is constant talk about personalization within the financial advice profession, and research about client preferences backs up the need to build communication plans that are as highly targeted as possible. 

Importantly, personalization doesn’t mean “basic” tactics like using an email platform to auto-generate first names. Instead, clients want their advisors to anticipate what’s important to them and engage with them about those personal situations.

5. Being empathetic

Empathy is a critical element in building trust and connection with clients, and advisors who master the implementation of a holistic, empathetic approach to client relationships give themselves a pathway to long-term engagement and retention success.

Empathy is not just about active listening; it’s also about the actions taken after a client has indicated what they need and how you can help them. Follow-through is the most important part of cultivating relationships.

6. Financial education

Financial education not only draws prospects to a firm, it helps to retain clients over time with relevant information. That principle can be seen best in the Great Wealth Transfer taking place as assets change hands from older to younger generations. By putting a focus on engaging with the next generation through education, advisors can attempt to keep more of the estimated 70% of wealth that leaves a firm after one generation.

7. Targeted campaigns to niche groups

Often, advisors think of targeting marketing campaigns only as a way to reach new prospects. However, targeted marketing campaigns to internal groups – like different segments of clients – are just as important to the growth and longevity of a firm as attracting new business.

8. Expand the services you offer

As a firm offers more services, it gives itself additional opportunities to engage with and talk to its current clients. For example: If you’re a firm that began with investment management and financial planning, adding tax planning can be a way to increase the value offered to the people you serve and even gain additional wallet share. 

Automate Your Client Engagement

Implementing an effective client engagement strategy is one thing, but even the most organized teams can quickly become overwhelmed by the communication needed to constantly stay in front of news, trends, and the personal, everyday concerns of clients.

That’s why, in addition to the client engagement examples offered above, automation is critical for an effective digital engagement strategy. With the 2023 Firm Growth Survey, we discovered interesting data to back up the need for automated client engagement in advisory firms. 

High-growth firms automate more communication

Overall firms who are growing slowly have less automated client communication than hyper-growth firms. But more importantly, they are roughly 1.5x more likely to have no automation set up at all. 

Automation is essential because it helps to free up time for advisors to develop their soft skills. In an industry like wealth management, where most advisors are expecting to be involved in business development and the prospecting process, automation can lead to more one-on-one personal interactions with clients and the time needed to follow up with prospective clients too.

When it comes to hyper-growth firms, 25 to 50% of communications are automated. When that much manual work is taken out of an advisor’s hands, a tremendous amount of free time is created to push toward revenue-generating activities instead.

Download the 2023 Growth Survey to read more about how high-growth firms are growing by automating their communication with clients.

Automation Leads to Personalization

When some advisors hear the word “automation,” their minds immediately think of impersonal communications, but that couldn’t be further from the truth.

The reality, though, is that personalized automation does ask for upfront time. When done correctly, automation involves correctly segmenting clients and groups, which can either take a few hours or a few weeks, depending on the quality of your data and the size of your existing list. That way, your firm can deliver personalized content without adding more work for advisors and staff going forward.

How exactly to implement automated client engagement strategies is an often-asked question, and that’s where technology shines. The best way to implement a personalized and automated communication process is with either your CRM or lead generation software, like a marketing automation tool similar to Snappy Kraken. 

Whichever technology solution makes the most sense for your firm, implementing workflows that put you in front of clients without the need to continually set up manual responses to every inquiry.

How to Build a Client Engagement Strategy with Nitrogen’s Risk Number®

Getting clients to consistently engage with your firm requires that you can quickly and simply show your value to them in real, tangible ways over and over. And most importantly, show that value in a way that’s easy for them to understand. 

The Risk Number® developed by Nitrogen is one simple way for advisors to offer an objective, quantitative measurement of their client’s true risk tolerance and the risk in their portfolio. By providing a quantitative aspect to financial advice, it’s easy for clients to engage with and understand the investment decision behind their financial plans.

Every advisor knows that the typical consumer is overwhelmed by financial information. On any given day, they may see differing headlines from their local news, The Wall Street Journal, CNBC, and a dozen other news sources. What each client needs is confidence in what they’re doing in that sea of information. The Risk Number provides a way for advisors to keep clients confident in their advice.

Most clients face a common fear – suffering losses that will derail their long-term plans. With the Risk Number at the center of annual reviews and other client conversations, advisors can turn fears into the confidence needed to make the right decisions for both the short-term and the long-term.

Whether you need to engage with prospective clients, help a married couple reach risk alignment, or simply remind clients during turbulent times that they are still within their confidence range, the Risk Number can help start conversations that keep clients invested right.

Connecting Portfolio Management to Client Engagement

Keeping clients engaged in their financial plan can’t end with conversations, though.  Engagement without results backing up those conversations will ultimately end up costing you clients and slow the growth of your firm to a crawl.

But how do you connect your client engagement strategies with the all-important investment and portfolio management work that you do behind the scenes to deliver results and desired outcomes?

Once again, advisors can lean on the Risk Number in these situations too. Once the Risk Number is established, you have concrete knowledge of how much risk a client wants to have in their portfolio, and you know if their risk tolerance matches to how they’re invested. But even more, you know how their current risk tolerance aligns with the level of risk tolerance they need to meet those goals you’ve discussed. 

Here’s how:

A portfolio-wide Risk Number, when combined with the 95% Historical Range that sets expectations for portfolio performance outside of any “Black Swan” events, enables you to make investment decisions that demonstrate alignment with the risk tolerance of your existing clients and new prospects.

When portfolios are built this way, you can directly connect the way you manage client portfolios with the way you talk to them about preferences, desires, fears, and the goals they’ve communicated to you. Investments and plans come together seamlessly.

And in the end, building portfolios around the same tools that you use to engage with clients brings symmetry across your entire organization. From every client conversation to every portfolio you construct, there’s a consistent process at the center.  

What the 2023 Nitrogen Advisor Growth Survey Reveals About Client Engagement

The 2023 Nitrogen Growth Survey identifies the challenges to growth that affect every advisory firm – and then identifies the way that high-growth firms are confronting those challenges and exceeding expectations.

When clients feel heard, they naturally reach out to their advisors more and remain satisfied clients longer. According to one survey, failure to properly communicate is cited by 72% of clients who fire their advisors. Clearly, effective client engagement is one of the most essential things for firms to invest in if they want to build more successful businesses.

Learn how client engagement strategies are powering growth and why Nitrogen customers are 60% more likely than non-Nitrogen customers to achieve hyper-growth. Take a tour today.