Why Financial Advisors Need Good Client Communication For Their Business

Posted on 30th March 2023

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What would come to mind if you were to list the top three qualities that a good financial advisor should have?

It’s likely you would mention great knowledge of the finance world, alongside an analytical mind and the ability to work under pressure.

But did you consider how being a good communicator can make a significant difference in the relationship between a financial advisor and their clients?

Here’s our essential guide to help you discover why and how you can improve your client communication.

Communication in Business: Why Is It Important?

Good client communication is an essential feature of any successful company. Communication is constant in the business world, from conducting meetings with prospective customers to making pitches over the phone and generally checking in on clients.

A respected business leader should also be an excellent communicator. Active communication stimulates knowledge sharing, aids with problem resolution, and helps achieve better outcomes in the long term.

No matter the industry, business leaders may find themselves explaining the VoIP caller meaning to customers or pitching to a potential partner. So, maintaining an open line of communication allows them to pinpoint potential areas of improvement, promptly address clients’ questions, and solve issues to deliver results. 

In the world of finance, being a great communicator is also key – let’s find out why.

The Importance of Client Communication As a Financial Advisor

It goes without saying that an excellent financial advisor is someone who has exceptional understanding, knowledge, and experience of the financial world and a strong analytical mindset.

But there’s no use having all the financial knowledge in the world if you can’t portray that information to clients and build a trusting relationship with them.

After all, a financial advisor often has to handle a client’s sensitive and confidential information and is there to help a client achieve their financial goals.

A client may even request the assistance of a financial advisor during a challenging time in their life or after an unexpected event, such as the loss of a family member, a divorce, an inheritance, or a budgeting issue.

All of these situations must be managed respectfully, tactfully, and confidentially by a financial advisor who is able to communicate with their client in a transparent and professional yet personable manner. It’s essential that clients have confidence in your abilities and trust you to make the right decisions.

So, as a financial advisor, how do you ensure that you communicate effectively to build trust and respect?

How to Establish Great Client Communication

To create a solid and loyal bond with your clients, it’s vital to establish a communication process that takes into account several factors. In this section, we will explore five of the most important ones.

1. Be Relatable, Authentic, and Trustworthy

First of all, it’s vital for you to prepare the ground and ensure that the relationship between you and your clients is one that values relatability, authenticity, and trust.

As we said, financial advisors often deal with extremely personal aspects of their clients’ lives, which puts them in a delicate position when it comes to being both professional and approachable.

Yet, it’s essential that you present yourself as exactly that: an expert who knows the finance world like the back of their hand while at the same time being fully committed to their clients’ financial situation and success, even when it means tackling potentially complex or controversial subjects.

For example, your clients may not understand the benefits of opening a new credit card to improve their credit score. This is where a trusted and experienced financial advisor like you is expected to shed light on how and why it could benefit them.

2. Organize Frequent Meetings

Once your client relationship is established, it’s important that you keep the communication lines open by setting up regular meetings with your client base.

Remember that these don’t necessarily have to be face-to-face meetings. In the era of hybrid and remote work, meetings can – and should – also include online catch-ups, webinars, and virtual events. Online communication channels are increasingly popular with companies of all shapes and sizes, from those offering payroll services for small business to large financial corporations.

3. Check in on Your Clients

If some time has elapsed between your last meeting and you haven’t heard from your client, don’t wait for them to chase you – be the one who makes contact first.

This will not only show them how dedicated you are to their situation, but that you also care on a personal level. Both of these are essential qualities that clients look for in a trusted financial advisor.

4. Choose the Right Communication Channels

It might be quicker and easier to pick up your phone and call your client directly, but if you have a larger client base, you might also want to consider other communication channels.

For example, you could send an email newsletter, write regular blog posts, and create a social media account. Whichever you choose, make it clear to clients that they can use any or all of these channels to not keep up with the latest industry or company news and, more importantly, to contact you if needed.

5. Face Potential Conflicts Head-on

Another very important, yet often neglected, aspect of being a good communicator is the ability to tackle conflict in a positive way. As a financial advisor, you deal with delicate, often thorny topics on a daily basis, from SOX to investments gone awry.

Don’t shy away from potential clashes with your clients. Listen first and provide feedback based on solid data and unbiased facts. 

The Bottom Line

Communication is essential for any job and industry, but it’s particularly crucial for financial advisors. Having excellent client communication means you can develop a rapport with customers and they can put their trust in you.

Start developing your communication skills today and watch your financial practice thrive.