Sudden market volatility, adjustments to the tax code, changes to estate planning laws, shifts in Fed policy – anytime there is significant change to economic policy or market conditions, investors get skittish. Change causes uncertainty, and uncertainty causes discomfort.
The same goes for changes – big or small – to a family’s wealth advisor firm.
In the current environment, families are increasingly encountering the big kind of change in the form of M&A. A growth-by-M&A approach risks signaling to families that they are no longer the focus of the firm’s leadership. Unfamiliar processes, new points of contact and even just different branding can give families anxiety about whether their goals and best interests are still top priority.
The discomfort and uncertainty that follows motivates many families to consider changing advisors.
Client attrition is not a foregone conclusion following a merger or acquisition, however. Advisors should see the M&A event as an opportunity to inspire confidence and deepen client relationships, which means eschewing impersonal mass emails and instead making the effort to reach out to clients directly.
Clients value personal touches, and advisors benefit by reinforcing trust in the relationship. It’s an opportunity to listen and connect, noting what each client values most in the relationship and addressing any concerns in a direct, personalized manner. For advisors, this approach is not just a strategy – it’s an effective way to build loyalty with your clients and to preserve and grow revenue in the process.
Preparation Is Essential
Before reaching out to clients directly, advisors need to prepare. It is important not only to hone your message but also to do your research, which will signal to clients that you’re truly invested.
Start by reviewing your client lists carefully, assessing each client’s situation and classifying them into three categories: very happy, content and not happy. Prioritize clients who are more likely to be dissatisfied or concerned by change, and use a high-touch personal outreach, such as a one-on-one meeting or a dinner to discuss the changes and how they will benefit.
You will also need to develop a clear narrative and create key messages that you and your team can use as guidelines when communicating with clients. Consistency in messaging is key during this time. Crafting your narrative and key messages ensures that everyone is on the same page, and that the message clients receive is consistent – whether it’s coming from you, another advisor in the firm or another member of your team.
Consistency in messaging is key during this time.
Prepare for questions by creating an FAQ document that advisors can refer to for quick answers. Your team can use this document to prepare for in-person questions, maintaining the same consistency in messaging across the firm. An FAQ document can also form the foundation of an FAQ page on your website for clients who are comfortable looking for information independently.
Identify The Right Methods To Connect With Clients
While a mass email might serve as an initial notification, it should only be the starting point. Follow up with a personal note to reinforce the message, showing clients that you’re taking the time to consider their individual needs and circumstances. Personal outreach – whether through a phone call, email, lunch or another form of direct communication – truly makes a difference.
In addition to one-on-one interactions, consider hosting small events, such as intimate dinners or lunches, where you can discuss the changes in a relaxed, informal setting. Webinars or podcasts can also effectively provide more details about the merger or acquisition, offering clients a chance to ask questions and to gain a clearer understanding of the future.
Continue The Conversation
Even after the deal closes, communication should continue. Engage with clients regularly, ensuring they feel valued and informed throughout the transition. If there are changes in leadership or the client advisory team, it’s important to stay involved for some time to ensure a smooth and seamless transition. This ongoing engagement is not just a task, it’s a commitment to reinforcing the stability and continuity of the relationship.
Your M&A-related conversations could segue into a review of each client’s strategy and investment portfolio.
For example, your M&A-related conversations could segue into a review of each client’s strategy and investment portfolio. Ensure that they’re on track to meet their goals and address any life changes that might require a strategy adjustment. Being transparent about what will change – and what won’t – is crucial. This could involve discussing the benefits of the merger, such as new services, improved back-office support or efficiencies of scale, while also addressing any concerns about leadership changes or succession planning.
While uncomfortable, communicating change does not have to be a negative experience. With thoughtful preparation, personal outreach and consistent communication, advisors can effectively retain clients during periods of change and simultaneously strengthen those relationships for the future.
Rosemary Denney is CEO of Wealth Matters Consulting.
