“You reached out via LinkedIn. I was impressed by that.” On Monday, March 7th I had coffee with a chef I first met through the historical society. He went to the Lake District in England to run a restaurant, then to Puglia in the heel of Italy. He kept his home in town and we got together upon his return. Why did we meet up after many years? It was the human touch.
Years ago, a manager at my previous firm talked about “High tech, low touch.” Looking at the four words, you can see four possible combinations. His point was regardless of the technology involved, maintaining high touch was important to retaining client relationships. As an advisor, it might be possible to use chatbots to interact with clients and provide answers to simple questions, but many people want a relationship with not only a human component, but someone they know.
- Every client feels their circumstances are unique. Although advisors might find many people facing the same problem need the same solution, most people feel their situation is special. Having a familiar voice explain how the solution you suggest is tailored to their circumstances builds confidence.
- Clients want long term relationships. There are instances when you make a purchase and walk away, possibly to never need to return. There are others where the purchase ties into goals you want to achieve, a project to be completed. They don’t want to be the person who needs to remember why we bought something and when we might sell it, they want someone who sees the big picture.
- Clients want someone emotionally invested in their success. Clients often want a relationship similar to personal training in the gym. They want someone who knows where they want to go and will hold their feet to the fire if they get distracted or lose interest. People can do that, machines not so much.
- Clients want accountability. Accountability is not responsibility. You aren’t giving them money back if an investment doesn’t work out. They want report cards. They want someone who says: “Thank you for following my advice. Here’s how things worked out.” Clients can be tolerant of losses (to a degree) if they feel you did your best. They aren’t tolerant when people (or machines) say: “It’s not my fault.
- Clients want someone to talk them off the ledge. When the stock market plunges, the instinctive reaction is often: “Let me get out while I still have something left.” You have seen statistics showing the average return of growth mutual funds and the average return of their owners. Impulsive decisions are often bad decisions. They need someone who can show them the bigger picture and help them make informed decisions.
- Pricing is often negotiated. People want a fair price. Some might search for the lowest possible cost while others understand “Free advice is worth what you pay for it.” When there is a familiar voice and you have an ongoing relationship, clients can be more understanding about why some costs must go up and others are staying the same.
- Clients want help with problems that don’t fit into neat little boxes. Have you ever used voicemail prompts or a chatbot that didn’t understand your question or put you into an unending loop? It drives you nuts. Clients want to talk with someone who knows who they are and is willing to offer advice on issues not directly connected to investments.
- Clients want needs to be anticipated. Advisors often call and say: “You haven’t made your retirement plan contribution.” Sometimes the call to older clients is about the mandatory required distributions. Close to year end, the call might involve tax loss harvesting.
- Clients need to feel wanted. You earn frequent flier miles when you fly or shop. These contribute to your status with the airline. Generally speaking, status needs to renew every year. If you stop flying, your status drops. It’s like the airline is saying: “What have you done for me lately? We don’t love you anymore.” Live advisors know how to say: “You are an important client to me.”
- Humans can recognize changes in behavior. Machines can too, but usually only if they interact online and patterns change. Humans can ask “What has changed in your life?” They can say: “Is something bothering you?” Human interaction can draw the client out and express empathy.
There is plenty technology can do to help, but it can’t replace the human element in relationships. This is likely the driver of the strategy to have fewer clients with larger relationships.