Success. Impress. Sales and Onboarding Your Last Chance to Make a Good First Impression. seic.com/advisors

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1 Success. Impress. Sales and Onboarding Your Last Chance to Make a Good First Impression seic.com/advisors

2 We all remember those big sales in our career. Weeks, even months of patience, nurturing and hard work finally paid off. Your prospect is now your client, entrusting you to guide his or her financial life and manage their assets. And while it was memorable, do you recall what worked or what didn t? Can you say with any certainty why that prospect selected you over others? More to the point, what did you do after the sale? What steps did you take to ensure your new client landed safely onboard? Did you live up to the high expectations you set during the sales process? Sales and onboarding are generally viewed as two separate processes, one following the other. But this article will argue that they are two components on the client service continuum. Sales, onboarding and continuous client service three intricately related stepping stones on a road to building long-term, loyal clients and advocates. In this article, we will share the latest research and our best thinking on sales and onboarding. Sales without a salesman In the post-crisis era, investors have even less patience for salespeople. The key, according to research from the VIP Forum, is to sell without acting like a salesperson. This calls for a seamless, documented and repeatable process from one sale to the next and across all members of your team. 1 There s little question that attracting high-net-worth investors is becoming more difficult. According to the Oechsli Institute, the percentage of advisors acquiring 10 or more clients with at least $500,000 in investable assets has declined steadily in recent years. 2 (See Figure 1) Figure 1: 10+ New Affluent Clients Each Year Investable Assets $1M+ 7% 3.9% 1.3% 1.9% 1.5% $500K $1M 12% 4.6% 1.3% 1.9% 1.8% $250K $500K 26% 7.9% 3.2% 4.5% 5.1% Source: Financial Advisor s Research Report, Oechell Institute, Such challenges have put a premium on professional sales skills. There is an ever-growing demand for communications and listening skills, patience, attention to detail and followup. Interestingly, sales executives appear to have raised their expectations for a variety of skills. When asked which are more important today, they listed pipeline management first, followed closely by need identification, communications skills and emotional intelligence skills. 3 (See Figure 2) Figure 2: Percentage of Executives Reporting Select Advisor Sales Skills as More Important Today Compared to 18 Months Ago Pipeline Management Need Identification Communication Skills Emotion Intelligence Skills Solution/Sales Presentation Negotiation Skills Objection Handling Lead Qualification Product and Service Expertise 0% 20% 40% 60% 80% 100% Source: VIP Forum Member Sales Effectiveness Survey,

3 The superior sales experience A superior sales experience starts with an advisor being prepared to lead a high-quality discussion about the prospect s goals and then leads to an explanation around how the firm s solutions are tailored to meet those goals. But clearly just knowing your stuff is not enough. Today, there is a premium on soft sales skills like communication and emotional intelligence. Is the advisor empathetic and understanding? Interestingly, executives in investment advisory firms give their advisors only passing marks in these areas. 4 It s also worth noting that the sales cycle is lengthening, which speaks to the need for greater patience and understanding. More than one-half of advisors surveyed reported that the sales cycle is longer than before the financial crisis. Faced with a decade of unprecedented uncertainty, more and more investors are challenged to make a decision. And it s showing. Advisors report that an elongated sales cycle is limiting revenue growth. Forty percent of wealth managers surveyed said acquiring new clients is their greatest hurdle to growth. 5 Take care not to overdo it With the growing pressure to make sales, it s natural for advisors to over-promise and set unrealistic expectations. Naturally, your intentions are well-aimed, but promising an unsustainable level of service has an obvious downside. Research shows that clients who feel as valued after the sale as they did before are more likely to recommend their advisor. By contrast, clients whose sense of value dropped after the sale were far less likely to make a recommendation. 6 What are the most effective tools for bringing in new clients? There are dozens of viable tactics for building awareness and wooing prospects, but research suggests some are far more effective than others. Introductions from friends, family and associates were by far the most effective marketing activity. Other effective activities include strategic networking, referral alliances (Centers of Influence), directly generated referrals and intimate client events. 7 (See Figure 3) Figure 3: Acquired 1+ New $1MM+ Clients by Marketing Activity 100% 2011 All 2011 Elite 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 47% 40% 41% Introductions Strategic Networking Referral Alliances Indirectly Generated Referrals 31% 25% 22% Directly Generated Referrals Intimate Client Events 15% Seminars Online Lead Generation 7% 4% 6% 1% 1% 0% Direct Mail Cold Calling Source: Financial Advisor s Research Report, Oechsli Institute,

4 Onboarding The Expectations are as High as the Stakes Like we said, you set some pretty lofty expectations during the sales process, but the minute the client agrees to go with you, the bar goes up. You re no longer in sales mode, you are now a financial professional expected to deliver. You re going to be measured against the client s previous advisor as well as client expectations of how things are supposed to flow. The client is watching to see if you can deliver on your promises. Any mistakes can seriously impact the relationship for months or longer. The expectations are as high as the stakes. Figure 4: Onboarding Standards Needed Firm Defines Minimum Standards and Measures Adherence 13% Firm Allows Complete Discretion The good news is that formalizing your onboarding process is not a big-ticket item, although you wouldn t know that by the relatively small number of advisors who have minimum standards for client onboarding. (Figure 4) We ll outline some critical must dos and a timeline to help you stay on track. Let s start with onboarding s benefits. Topping the list is greater client trust. An orderly, timely and error-free onboarding process makes the client feel welcome and reinforces his or her decision to have hired you. By getting things off to a good start, you re well-positioned to evolve the relationship. 48% 39% Firm Provides Recommended Standards But Does Not Measure Adherence Onboarding is your last chance to make a good first impression. Solid onboarding will move the client along the relationship continuum. At the front end is the customer relationship, defined as transaction-oriented. Client relationships involve ongoing transactions accompanied with advisory services. Over time clients can become loyal clients, willing to stick with you in all markets. But it doesn t end there. The final step the goal of all relationships is turning a loyal client into an advocate. Advocates are not only loyal, but committed to your success and a source of repeated referrals. 8 Other benefits of an orderly onboarding process include: Improving client retention Creating the perception you re easy to do business with Differentiating you from the competition Reducing the chance for operational errors Freeing you to focus on revenue generation Source: VIP Forum, Onboarding Standards Needed, Figure 5: Onboarding Experience Drives Recommendations 70% 60% 50% 40% 30% 20% 10% 0% New clients who recommend their firm by rating of their initial reactions Fair to Good Very Good Excellent Source: Onboarding Experoence Drives Recommendations, CEB TowerGroup,

5 The Onboarding Process There is no magic formula for onboarding, nor should it be a cookie-cutter process. You ll need to build in flexibility to match the needs of your new client. Here are nine recommended steps to successful onboarding: 9 1 Create a checklist to ensure nothing gets dropped and to achieve consistency from one client to the next. 2 Ensure all team members understand their roles. 3 4 Create a brochure or handout that ensures new clients understand the onboarding process, the schedule and what to expect. Setting and meeting expectations builds confidence. Standardize client communications with templates for client letters and s. 5 Provide all clients with a New Client Welcome Packet. Include required forms, company brochures, bios of key staff and relevant educational material. Consider giving the new client an organizer or a binder to store the documents. Offer your staff to get it started off right Formalize the thank you. Don t stop with the call or letter, although these are essential. Schedule a lunch or another meeting. Survey clients about their perceptions of your firm and the onboarding process. We recommend an informal how s it going check at the midpoint, and then a more formal online survey after the client is fully onboard. First statement review - the client will be watching this one closely, so make a point of touching base, reviewing investment objectives and taking the client s temperature. First anniversary review another natural point to measure the client s satisfaction. Remember, the objective is to slowly move them along the client relationship continuum to the status of advocate. 5

6 Measuring the fit While these steps are important, effective onboarding is about more than templates and thank you notes. Fundamentally, the goal is to make a good marriage. Like any solid marriage it calls for honest and open communication. You ll want to make a point of sitting down with the new client and having a frank discussion about expectations and values theirs and yours. Your new client will be measuring you against their previous advisor. If you re their first advisor, they will have expectations set by someone else, usually a friend or family member. What kind of advisor are you? What do you expect from yourself and from them? What s important to each party? Addressing these questions up front could spare you heartache down the road when the client has forgotten why they hired you and seems more focused on short-term performance than long-term goals. The messages you send We hope this discussion will prompt you to examine how you bring clients onboard. There s no question that a clean onboarding process sends innumerable messages to your new client and their trusted circle of friends and family. It says you re competent, organized and trustworthy. More fundamentally, you re saying We re excited about the relationship and committed to your success. It s natural for all clients to experience a touch of buyer s remorse. A responsive, orderly transition will nip any remorse in the bud. 10 More to the point, effective onboarding will also reinforce your brand. It affects your overall reputation and defines you as a firm. For more information on onboarding or any of SEI s Practice Management programs, please contact an SEI Practice Consultant at or visit seic.com/advisors Information provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company. FOR FINANCIAL INTERMEDIARY USE ONLY NOT FOR USE WITH THE PUBLIC 1 Corporate Executive Board, Delivering a High Quality Client Experience Across the Relationship Life Cycle, Financial Advisor s Research Report, Oechsli Institute, VIP Forum, End-to-End Experience Excellence, 2012; Missing the Mark on Key Skills, Ibid. 5 Ibid. 6 VIP Forum, End-to-End Experience Excellence, 2012; Relationship Expectations Matter, Financial Advisor s Research Report, Oechsli Institute, Clientwise.com ClientWise, 9 Client Onboarding Strategies for Top-Performing Financial Advisors, 2012 & Paragon Resources, Know No Bounds, Accenture, 2011, Smarter Onboarding: The Key to Higher Client Retention and Cross-sell, SEI (3/13) 6