While financial advisors offer valuable services for their clients, it can sometimes be challenging to gauge how much clients actually value those services. On one hand, a client’s willingness to pay an ongoing fee for financial advice suggests that they find the advisor’s services worthwhile. On the other hand, the term “financial advice” often refers to much more than asset allocation and wealth management. Many firms also offer regular meetings, webinars, client portals, and other services to enhance the client experience. Yet, with so many services available, it isn’t always clear which ones truly make a meaningful difference.
In the 155th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can look beyond engagement metrics to understand which services have the greatest impact on their clients’ experience.
Engagement metrics are often used to gauge how much value a client derives from their financial advisory firm’s services. For many advisors, a shift in engagement – such as a long-term client requesting fewer meetings – can be a cause for concern, as it might raise red flags signaling disengagement or even a potential move to another advisory firm. However, changes in behavior like this don’t always indicate a problem. For instance, the same client wanting to reduce their meeting frequency from three times a year to just once might reflect not a loss of interest, but instead increased peace of mind, trust in the advisor, or confidence that if anything urgent comes up, they will connect with each other anyway.
This principle extends across many aspects of a firm’s value proposition, from client newsletters to account log-in frequency to other common metrics of interest. While offering valuable resources to clients can make a difference, providing too many options risks overwhelming the client. Rather than reinforce the advisor’s value, excessive offerings might even be a turn-off for the client, detracting from their overall experience.
This tendency to ‘over-service’ often comes from good intentions of providing great service and justifying the fee for financial advice, and advisors may hesitate to scale back out of concern for removing something clients value (e.g., a monthly newsletter they enjoy reading even if they never reply). To better understand what truly resonates with clients, advisors may find it worthwhile simply to start by asking. For example, sending a client engagement survey or talking with clients can provide meaningful insights. Similarly, investigating offerings that clients don’t engage with – such as document vaults that they rarely use – can reveal where advisors can focus less effort, giving them more time to focus on what really does make a difference.
Ultimately, the key point is that traditional engagement metrics may fall short in capturing the true value clients place on financial advisory services. And, in a world where clients are increasingly busy and advisors face competing demands, the real opportunity lies in figuring out what truly matters to clients. By identifying the services that create the most meaningful connections and deliver the greatest impact, advisors can allocate their time and energy where it matters most – deepening trust, enhancing the client experience, and strengthening long-term relationships!