You may feel that your clients only care about how their investments performed under your management. While it's true that they do want to see results, you might be surprised to learn what can matter just as much—empathy, understanding, shared values, and personal connections. All of these converge into one core concept that drives strong client partnerships: alignment.
This might seem like a “softer” attribute of the client relationship, but it can shape how a client views you and, ultimately, influence their decision to stay or switch to a different advisor.
To help you understand how to strengthen your relationships, consider these five ways to align with clients.
1. Practice Active Listening.
Simply listening more can dramatically improve how well you connect with clients. Consider leaving more space in meetings for clients to speak, and encourage conversation by asking questions and using phrases like, “Tell me more” and, “What does this look like in practice to you?”
You can also demonstrate that you heard and understood what clients have shared by repeating back some of what they said. You don't need to parrot them. Instead, start with, "This is what I heard," then rephrase what they told you, and finish by confirming, "Is that correct?" This practice helps cement a common understanding of the client's situation.
2. Understand the Reasons behind the Numbers.
Clients are more than just numbers. They're people, and people come with complex feelings and emotions. Tap into that when you can. Helping clients understand their risk tolerance, for example, is a good opportunity to connect with them and forge a deeper sense of alignment.
When a client takes a risk tolerance questionnaire, for instance, review their results together with them. Don't simply tell them what their score means; ask for their opinions so you can uncover how they think. What personal experiences helped shape their understanding of risk? Do they hold fundamental beliefs that influence their feelings about taking risks with their investments?
Similarly, explore clients' feelings about their financial legacies and the environmental or social impact of their portfolios. This conversation gives you a chance to show them how their money and values—and your services—can align.
3. Work as Equal Partners.
Clients, especially women, report that being treated as an equal is extremely important to them. As a financial advisor, you're a specialist in finance and investments—but your client is the expert on their life and goals.
Respect that expertise by inviting them to be part of the process and understanding their goals before making specific recommendations. This way, you can demonstrate how their financial goals align with their needs and ease any worries that your motivations don't support their interests.
4. Stay Accessible.
Clients trust you with their money. In return, they want to know they can rely on you when they need support—both on the technical aspects of their investment decisions and for more emotional guidance around money in general.
Forging a personal connection and instilling feelings of alignment may be easier face to face, but virtual meetings work, too. In general, you may be able to strengthen a client relationship by scheduling multiple meetings per year—and then taking client calls when they need to speak with you, rather than putting it off to the next meeting on the calendar. Remember, people and their circumstances change, and alignment is as much about staying aligned as it is about getting aligned in the first place. Proactively reaching out can show you understand what your clients need, too.
5. Serve as an Educator.
Many clients lack confidence in their investment knowledge because they never got the opportunity to learn about it in their personal or professional lives. This doesn't mean they want to defer every decision to you, however.
Providing clients with the education they want but never received allows them to understand the thoughtful decision-making you put into your recommendations. Invite questions, and take the time to explain the mechanics of a recommendation or investment. Not only will your clients be more informed, but education can also aid you in connecting with them and building trust. And helping your clients fill their knowledge gaps gives you another opportunity to provide value and help meet your clients' nonfinancial needs.
Finally, as you work to align with clients by understanding their goals, needs, and values, don't overlook the power of sharing your own story, too. Especially when it helps highlight a shared concern, principle, or priority, promoting two-way alignment can be a powerful point of connection with your clients.
"New York Life Investments" is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.
Insights presented in this report are derived from 2019 & 2020 studies conducted by NY Life Investments in partnership with RTi Research.
The writer of this report is a freelance writer and not affiliated with New York Life Investments