Why Financial Advisors Need to Level Up Their Customer Databases

By Joe Greenspan.

As tax season comes to a close, tax professionals are taking stock of this year’s performance and likely realizing that operations could have gone smoother. Maintaining marketing emails, calls and in-person meetings during the busy tax season is regularly a daunting task for financial advisors (FAs)—especially those who run small operations and don’t have the resources to keep track of it all—and the stress of the ongoing pandemic has only exacerbated the situation. So how can FAs set themselves up for success moving forward?

Technologies like Customer Relationship Management (CRM) tools can help FAs stay organized amid this demand—that is, if they leverage the tools to their full capabilities. While many advisors already maintain a customer database, these systems are often little more than digitized Rolodexes. As such, they lack the capabilities FAs need to pursue leads and foster stronger client relationships on an ongoing basis.

It will take the combination of modern CRM capabilities and user best practices for that database to deliver meaningful value to FAs. As FAs contemplate how they can optimize operations to stay calm, cool and collected during busy periods like tax season, here are some best practices to consider for leveraging CRM tools to their full potential.

Automating marketing activity helps FAs stay top of mind for clients

Smaller financial institutions often distinguish themselves through the personable care they offer clients. However, routinely delivering this level of attention can become burdensome for teams with limited bandwidth. For instance, whereas clients may enjoy thoughtful communications from their advisors, taking the time to type out emails one by one can quickly consume FAs’ days. Not delivering this attention risks client churn, with one-third of customers who abandoned a business relationship last year doing so because personalization was lacking.

It’s time FAs automate their marketing activity. That way, FAs can consistently and meaningfully engage clients at scale without devoting so much time to developing communications themselves. By partnering with a vendor that offers email templates and automated campaigns, FAs only need to customize and select their distribution list. With more advanced systems, FAs will also then be able to track communication engagement to better understand which topics are most interesting to clients so they can repeat successful efforts in the future.

In addition to allowing FAs to distribute thoughtful communications with ease, automating marketing activity enables them to maintain a pipeline of communications to keep services top of mind for clients. With the ability to schedule communications in advance, FAs can be more proactive with outreach. This is crucial, as engaging both past clients and prospects at the right time—such as weeks before tax season starts—is often the difference between securing a client’s loyalty and them taking their business elsewhere.

Similarly, FAs can develop emails to educate clients on financial best practices throughout the entire year so that when tax season returns, the process is as seamless as possible. Likewise, FAs can advertise other services that they may have neglected during the craze of tax season so that clients understand their business’s full value and know how to leverage its services once taxes are wrapped up. Consistent, informative communications is key for FAs demonstrating that they have clients’ best interests in mind.

Advanced CRM tools clue FAs into when it’s time to engage clients

Clients want to trust that their financial needs will be taken care of during tax season, but with FAs’ limited bandwidth, it can be difficult for clients to receive the level of attention they expect to keep them loyal. Traditional customer databases aren’t helping FAs either. While these systems are useful for storing contact information, those data aren’t actionable on their own.

Modern CRM platforms help FAs nurture prospects and reveal opportunities to strengthen client relationships. When a prospect or client meets certain criteria—for example, they download a budgeting worksheet on an FA’s website—the CRM system can send an automatic follow up to set up an input call with the individual on how the FA might help them reach their savings goals. Additionally, the system can alert the FA to when a relationship would benefit from an in-person meeting to ensure the client feels the FA’s full support.

Dynamic CRM tools can also make those interactions stronger by providing FAs with a holistic overview of a client beforehand, including service history and any pain points the client may have previously expressed. Where a static customer database won’t give insights into when a client interacted with another member of the FA’s team, modern CRM platforms capture all aspects of the customer’s lifecycle. That means FAs aren’t repeating questions or making uninformed recommendations to a client, which only work to frustrate the individual. Instead, FAs will be able to deliver personalized care that distinguishes their business from competitors and exceeds the expectations of clients.

Staying competitive, especially amid the craziness of tax season, will require FAs to level up their customer databases. With modern CRM tools and strategies to best use them, FAs can stay on top of client needs and communications, thereby cementing themselves in clients’ minds as knowledgeable and caring advisors. As tax season winds down, FAs would be wise to leverage the relative downtime to adopt robust CRM tools and set themselves up for success all year round.

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As VP of Commercial Operations at Act!, Joe Greenspan leads a team focused on customer revenue growth, strategic commercial programs, and operational excellence. With nearly a decade at Act!, he is a change agent driving pricing and commercial strategies, product and service launches, messaging and positioning, sales enablement, and customer lifecycle activities. Before Act!, Joe spent 13 years at Sage in various product and commercial leadership roles, with the majority of his tenure leading high-performance Product Marketing teams. Joe holds an MBA from Arizona State University and a bachelor’s in psychology from Santa Clara University.

Firm Management