Turn your top clients into business alliesHow to create a client advisory board

In my last post, I talked about how a client advisory board — or CAB — can be used to strengthen relationships with your top clients, to develop business strategy, and to generate high-quality leads over the long term. The choices you make when setting up your CAB can have a dramatic impact on the ultimate value you gain from your board.

A CAB should be large enough to affect dynamic conversation, but not so large that it stifles it. Ideally, aim for 12 to 15 members. Still, the number is just the first step. Getting the right mix of people in the room can be the difference between an effective, business-boosting board and a dull, time-wasting group meeting.

Consider your ideal client

Over time, a CAB can help you identify valuable prospects and perhaps even become a source of referrals. These clients may exemplify the type of person with whom you most want to work. Available investment assets are important, but you should also reflect upon the following:

  • Which of your current clients do you like to work with the most?
  • Which relationships are most satisfying?
  • Who has influence within your community?
  • Whose investment needs align well with the strategies and philosophies you embrace?

Create a portrait of your ideal client and keep it in mind as you develop your CAB. The closer CAB members are aligned with this portrait, the more likely you’ll be to attract those types of clients in the future.

Avoid uniformity

Select members who are outspoken enough that they’ll offer candid feedback — but not so gregarious that they could steer meetings into unproductive territory.

Consider a combination of singles and marrieds, business owners and executives, retirees and younger professionals. Each will view wealth management through a different filter. So long as they have attributes of your ideal client, each will bring something unique and useful to the table.

Involve at least one millennial

While many millennials are just starting to accumulate assets, the inclusion of this group — which now represents a full quarter of the U.S. population — can boost growth potential for a practice with an eye on long-term expansion.

Within the next decade and a half, the oldest of this cohort will reach their peak earning and investing years. That’s also around the time a large bulk of today’s financial planners will start to seriously consider retirement and succession planning. (The average advisor today is in their 50's.) In short, your future ability to transfer your practice could hinge upon its demographic make-up. After all, how much is an aging book of business worth to a young, high-achieving planner?

According to Dr. Nathan Harness, director of financial planning at Texas A&M University, one of the best ways to attract millennials to your business is by working with someone they can relate to: another millennial.

Welcome nonclient influencers

Your CAB should consist primarily of the high-quality clientele you’d like to replicate. However, you might reserve a spot or two for professionals who understand different aspects of your business, but whom are not direct clients. An accountant from your referral group, your wholesaler, or a community leader can all offer valuable outside insights about what’s working — and what isn’t — for your business.

Personally extend the invitation

Once you’ve determined your ideal CAB members, set aside time to personally invite each prospect. Don’t pass this task off to an assistant. You are, after all, requesting a time commitment. Invitees are usually honored to have been selected, so the call is an opportunity to let your top clients know just how much they mean to you. The invitation is just the beginning. Over time, relationships with CAB members can flourish, leading to unimagined business insights and often to a deeper pool of the exact type of clients with whom you want to work.

In my next post, I’ll discuss how to conduct an effective client advisory board meeting, as well as explain a long-term strategy to help keep your CAB engaged in the growth and development of your firm and client base.

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.

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