What we have learnt about risk profiling for client retention and acquisition

Integrating risk profiling techniques into your advising is essential to keeping clients satisfied, running an efficient practice and meeting ever growing regulatory needs.  But how can you leverage the work you’re already doing to get the most out of risk profiling?

There are many benefits to integrating risk profiling concepts into your practice, beyond the obvious core solution of helping you to find optimal portfolios.  This is where we begin to view risk profiling as a relationship management tool rather than just a means to form advice.

From speaking to countless advisors and tailoring our product offering to their wishes, this is what we have learned about what risk profiling can and should be.

  1. A critical client education tool.  Seasoned users of risk profiling methods know this is actually the core benefit of risk profiling, but to the outsider this feature isn’t so obvious.  Educating clients and prospects about the market and themselves is a first level benefit of risk profiling and a great way to show prospects that you have information to offer them.  For existing clients, expectation setting via this education is the basis of no-surprises advice and central to their comfort throughout the cycle.

  2. A way to engage and spark interest.  We’ve seen how well learn-about-yourself style surveys perform relative to other client acquisition methods.  There’s no doubt that people of all demographics are interested in learning about their psychology. Leverage this innate desire to connect with leads and capture their details

  3. Medium for clients to feel involved and cared for.  There’s something clearly personal about asking a client their thoughts and feelings and this is a subtle way for an advisor to foster perceptions of care.  Risk profiling is also something that is relevant and approachable for anyone, regardless of their financial acumen, and thus is a perfect way to involve all types of clients.

  4. Periodic catalyst for client check-ins.  It’s becoming more and more important to show your value to clients at multiple touch points throughout the year, however sometimes you need to find information that is pertinent to them.  Knowing your client’s risk profile and market movements that may potentially pique their interest is a great excuse to check in with them and start a broader chat. This view of risk profiling is also where we begin to use it as a method for client relationship management.  That is, proactively assessing their comfort throughout the year and addressing it before it becomes a problem.

There are many subsidiary benefits to incorporating risk profiling deeply into your practice, many bubbling up to retaining and acquiring new clients.  All that is required is that you take a broader view of how you can learn, engage and service your clients.