Delivering Clients’ Best Interests Requires an Effective Service Model

Journal of Financial Planning: February 2017


It’s too soon to tell if and what changes may happen to the Department of Labor’s Conflict of Interest Final Rule under a Trump administration. That said, the intent of the rule remains important—that anyone who acts as a fiduciary guarantees that the client’s best interest always comes first. Who can argue with that?

The new rule defines a fiduciary as anyone who receives direct or indirect compensation for providing advice on retirement assets (for example, retirement plans, plan participants, beneficiaries, and IRAs). Confusion, however, arises as financial service providers across the industry try to determine how this new rule impacts them and what to do about it. As a result, it may be difficult for advisory firms to be confident their service model results are always in a client’s best interest. Advisers need the right processes and documentation in place to assure clients that they are watching out for them.

Do You Have an Effective Service Model?

No matter the type of financial advisory practice, it’s now table stakes to have a well-defined and premium client service model; not just a call management system but systematic, repeatable, and integrated processes focused on each client’s holistic financial life. The challenge can be determining how a firm delivers these services. What is needed to ensure a product or service is in the client’s best interest? And how can the service be delivered at the right time based on each client’s individual needs?

Consistent outperformance of the market is near impossible, making it important for advisers to be able to deliver consistent, scalable, and ongoing comprehensive financial advice. As the advisory industry and client expectations continue to change, it is important to continue to assess the client value proposition and service experience. Take time to step back and very clearly define your client value proposition and determine if a premium client experience can be delivered. This can be achieved by defining the tasks, skills, roles, and tools needed to systematically deliver that client experience. At the same time, evaluate if the tools and processes to do so are efficient and profitable.

For many firms, the optimal client has wealth and an aptitude for both saving and investing. It would be great if there were an abundance of these folks, but very few people naturally have these attributes. Therefore, it’s important to help clients improve their decision-making related to saving and investing. That may sound relatively easy, however, clients’ emotions often get in the way. And it gets even more difficult when numerous different types of financial decisions are bundled together. It is important for advisers to effectively coach clients to save, invest, and make timely decisions based on their individual goals and needs.

Tips for Delivering a Premium Client Experience

Unbundle and re-bundle decisions. It is important to help clients make the right decisions at the right time. So, it’s best to align the client service process with how clients think. Our brains are not wired to address family issues such as estate planning, family security, and education at the same time they are trying to comprehend investments, risk tolerance, and rates of return. Neuro-economics—the combination of economics, sociology, and psychology—shows that numerous parts of the brain and many factors impact how clients make economic decisions. It should be easy to step back and ensure “like” types of decisions are addressed together, and that the client is given the time to absorb and process.

Clients are continually bombarded by media of all types, from which they build both good and bad beliefs. To overcome all the clutter and balance the ever-present fear and greed impulses, the client experience should be relevant and consistent.

Be proactive. Clients need to be prepared for both the expected and the unexpected. Helping them plan for life goals, including retirement and education, needs to be addressed in addition to planning for unexpected health issues or accidents. It seems intuitive, but to be successful at helping clients reach their goals, it is imperative to help them plan for retirement long before they plan to retire, and to save for college long before their kids graduate from high school. It can be easy for clients to rationalize taking vacations and/or buying big homes while their children are young, missing out on saving for their long-term education. Showing the impact of decisions can help clients make informed decisions, and therefore increases the value of the advice given.

Be consistent. Clients consistently experience life changes that impact their financial lives, and it is paramount these changes are taken into consideration when providing advice. Clients need and deserve a dynamic service model that consistently addresses changes relevant to them. Clients should be able to recognize and articulate the service they receive, making it important for the same experience to be consistently repeated. By repeating processes, clients may retain and react more easily to financial concepts and investments recommendations.

Be relevant. By aligning processes seasonally, clients may better internalize decisions they have made and what will be addressed next. A success measure for a client service model is ensuring it is designed to consistently update a client’s situation and ensure changes are addressed.

A Confidence Check

Do your processes, procedures, and tools ensure the client’s best interests come first? Are clients ensured a premium experience? Is the proper documentation in place, and are processes efficient and effective? Do they support revenue growth? If the answer to any of these questions is no, it is time for change.

Patricia Moren is managing partner of Seasons of Advice® Consulting (, a financial service consulting and coaching firm.

General Financial Planning Principles
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