Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
We are rolling out a new investment approach. Our advisors have agreed to outsource investing and we are migrating our accounts. It’s been a very, very long decision-making process to determine how best to shift investment management and communicate internally. Now, the hard part comes – communicating this change to our clients.
We argue daily about the best way to present this new approach. We don’t want to be perceived to be abdicating our responsibility to our clients or that we don’t know what we are doing. While we believe it is the right thing to do for our firm and for our clients, conveying this in a non-defensive way is difficult. Have you seen advisory firms make this transition and convey a positive spin for their clients?
A.E.
Dear A.E.,
Your note does not say why, exactly, you made this change. Was it because your investment approach was underperforming? Was it because you want to spend more time working directly with clients and helping them with other areas, such as life planning? You say your advisors “finally agreed” which would imply this has been considered and discussed for some time, but only recently agreed to by all. What triggered the decision to finally make this move?
I would explore the underlying motivators and decision-points that led you to make this change. Be sure there are benefits to the clients and that, for example, it wasn’t purely because it is a less expensive, less labor-intensive way for you all to run the business. Be objective about your motives and identify the triggers that ultimately led you to this decision.
When planning client communication you have to be truthful. While you can “spin” anything, and everything can be reframed positively (or negatively), you want to articulate the underlying rationale of why this is a good and beneficial decision for your clients. Think about the value to them – what do the clients get as a result of your making this transition?
This said, is it completely necessary to share all of the reasoning behind this decision? Do you have to let clients know exactly what is happening behind the scenes of your investment approach? In some cases clients want the sausage but they don’t necessarily need to (or want to) know how it was made!
It all depends on how you have messaged this in the past. If historically you have focused a lot of your story on your investment approach, such as how you pick funds and how you create portfolios and clients are very attuned to this, then you need to explain the new approach and the reasons for it. However, if you don’t share all of how you create the portfolios and clients are not tuned in to every move you make, you only need to share that you are shifting your approach and they may see changes to their portfolios as a result.
Establish the meaning behind this move, why and what prompted you to make it. Then uncover the aspects of this that are truly beneficial to your clients and find ways to show them this benefit. Examine exactly what the clients will see as a result of this. Any questions they may have, or experiences as a result of this change, need to be communicated in advance. You are right to think about how to put a positive spin on this so you are not fielding questions or concerns after the fact.
Be proactive in change-management communication instead of being reactive and seeming to defend a decision that could be construed by clients as unpopular. Controlling the message is very important.
By Beverly Flaxington, read the full article here.
