Evolve by involving your clientsA client advisory board helps build a culture of co-creation

Ask yourself this: What do your top clients like most about working with you?

Your investment management strategy is probably high on the list, but many wealth managers are often surprised to learn that certain basic amenities they may have considered unimportant — like convenient client parking or a standard follow-up service call — are sometimes the unexpected make-or-break elements that keep a favorite client coming back year after year.

Still, it can be a challenge to measure the more qualitative aspects of your customer service and marketing strategies. That’s why the most effective wealth management practices are turning to the creation of a client advisory board, or CAB.

A CAB is a hand-picked long-term focus group that helps an advisor gain clarity about what approaches could be most effective for future business strategy, growth, and even transformation. Even better, it’s a low-cost strategy that, if implemented effectively, could yield significant benefits over time.

A relationship strengthener

The most engaged clients are often the most loyal. Effective CABs meet regularly, perhaps once or twice a year, depending on the scope of your goals and the availability of your board members.

By offering top clients a seat on your CAB, you create the opportunity to strengthen relationships with those who have likely influenced your success. An effective CAB can foster loyalty, trust, and goodwill among these important clients and the members of your firm. Over time, stronger relationships can increase the likelihood that your best clients will stick around for the long term.

A business development tool

A CAB can also be one of the most effective ways to identify — and reach — your target market. Ideally, your CAB will be made up of clients who reflect the prospects you ultimately want to reach.

Your CAB members can tell you what they value (and don't), and how they prefer to receive information. What's more, you'll be able to hear the actual words clients use to describe your services. These conversations can give you fresh, real-world language to describe your services, and can help breathe new life into how you describe the value you bring to the marketplace.

Advisors targeting millennials, either as a growth opportunity or as part of a succession plan, can learn a lot by adding a member of this cohort to their CAB. The oldest millennials are now over 30, and they are expected to inherit $30–40 trillion from their boomer parents, according to Dr. Nathan Harness, our advisor education consultant and director of financial planning at Texas A&M University. Further, one in three entrepreneurs belongs to this group. In short, the millennial market represents a significant opportunity for advisors, particularly those who want to diversify a book of business as part of a long-term succession plan.

A lead-generation strategy

Many clients are thrilled and even honored to serve a term on a CAB. As you work with them over time to discuss marketing strategies, customer service preferences, and client acquisition techniques, many will naturally feel compelled to refer friends and colleagues.

Still, the primary goal of a CAB is not to solicit referrals. Asking outright, particularly early on in the life cycle of a board, can backfire. Instead of enhancing relationships, a direct request can lead clients to view the board as a thinly veiled solicitation.

Instead, let referrals happen organically. As you and your board work closely over time, members will instinctively connect referral opportunities. It’s more important to foster those existing relationships than to pry a few names from your trusted advisory board.

In future posts, I’ll discuss best practices for setting up a CAB of your own, how to incorporate the next generation into your CAB, and how to keep your advisory board engaged in the process.

This content is for informational purposes only and is not an endorsement of any app, service, or publicly traded company. It is also not a recommendation to buy or sell a particular security.

All third-party marks cited are the property of their respective owners.

View archive

Contact us

Sales desk: 877 693-3546

Receive updates from The Evolving Advisor

Subscribe to our quarterly newsletter for the latest in practice management.

Privacy statement

Receive updates from The Evolving Advisor

Thank you for your subscription!

Evolve and engage