Why Is Relationship Building Essential As A Financial Advisor?

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The world of finance is about more than just numbers and market trends. It’s about people – how you treat them and their hard earned income

Here at Consolidated Planning, our planning philosophy takes into account the consultative nature that really should be financial advising.

In this article, we’ll delve into why relationship building is more than just a soft skill but a strategic imperative for financial advisors and the trajectory of this career path. From here you can decide if your firm allows you the time and space to focus on relationship building first and foremost.


5 Reasons You Should Focus On Relationship Building As A Financial Advisor


#1 People Want To Work With Someone They Like

Now, don’t get us wrong, consumers obviously want an advisor who knows what they’re doing. BUT, being the best in your market and unlikeable is something most people can’t (and won’t) overlook. This doesn’t mean that you’ll always end up being the best fit for your client, but you should strive to understand who your ideal client is. More to come on this.

Not surprisingly, the cornerstone of a successful financial advisory career is trust. Not only do your clients entrust their hard-earned money to you as their financial advisor but they come to you at vulnerable times during their life, sharing some of the most personal parts of their lives.

And this kind of trust is not built overnight. Establishing a genuine connection with your clients goes beyond discussing investment strategies, in fact, if that’s what you’re leading with, you’re going about it the wrong way. Especially if you’re trying to build a consultative and not transactional practice.

This foundation requires an understanding of their financial goals, fears, and aspirations. By taking the time to listen and empathize, before trying to sell something, you can lay the necessary trust for creating a solid basis for a lasting client-advisor relationship.

And that relationship is what gives you long-term stability in your career.


#2 You’re Tailoring Solutions To Individual Needs

Financial goals are not one size fits all. In fact, financial goals are as diverse as the individuals pursuing them. Effective relationship building allows you to gain a deep understanding of your clients’ unique circumstances. From here, your recommendations can flow in a way that makes sense for your clients. Think strategy before product.

Whether these solutions include retirement, saving for a child’s education or cash flow management, personalized solutions are what makes a lasting client-advisor relationship. This kind of relationship provides the insights necessary to tailor financial strategies that align with the client’s specific goals and aspirations.


#3 You’re Navigating Life Transitions Together

Whenever there is a big change in your client’s life, a meeting is often necessary. Life is full of transitions – good and bad, and these transitions often come with financial implications. 

You are more than just a number cruncher, you’re a trusted guide through life’s twists and turns. Building a relationship that extends beyond the financial realm enables advisors to proactively assist clients during significant life events – be it marriage, starting a family, or planning for the next generation’s financial future. 

This level of support fosters loyalty and reinforces the advisor-client bond.


#4 You’re Weathering Market Volatility Together

Financial markets are inherently unpredictable, and some clients can experience anxiety during periods of volatility. Reassurance is golden for this client.

Regular communication, transparency, and a thorough understanding of your clients’ risk tolerance allows you to guide your clients through market ups and downs. In times of uncertainty, a trusted advisor can be the steady hand that helps clients stay on course and avoid making impulsive decisions. And trust us, we’ve seen many impulsive decisions that would affect far more than just weathering the market together.


#5 You Want To Receive Referrals

The day you receive incoming calls for your services is a day like no other. Referrals are the bread and butter of this industry and the goal of most financial advisors. 

Without receiving referrals, you will always be wondering, “Where will my next client come from?”

Satisfied clients not only remain part of your practice for the long haul but they are very likely to send you referrals and make introductions on your behalf. Building relationships that extend beyond the transactional nature of the business can turn your clients into advocates. 

Positive word-of-mouth referrals is truly your best source of marketing. According to a study by Nielsen, 92% of consumers trust recommendations from friends and family over all forms of advertising. 

Building a referral based practice is a testament to the trust and satisfaction clients feel, ultimately contributing to the growth of a financial advisor’s client base.

Chat with a team member


How To Build Better Relationships

While building relationships is more innate than learned, there are steps you can take to build BETTER client-advisor relationships.


Pinpoint Your Ideal Client

Determining your ideal client involves a strategic assessment of various factors to ensure a mutually beneficial and prosperous relationship. This kind of relationship is the foundation for the long-term career growth you’re hoping for. 

Here you must analyze clients whose characteristics harmonize with your experience, business model, and personal preferences. In this process, you should consider the following key aspects:

  • Financial Goals
  • Communication Skills
  • Financial Responsibility
  • Long-Term Perspective
  • Willingness to Follow Advice
  • Sufficient Assets or Income
  • Compatibility

All of these factors add up to a client that is most ideal for you and your practice. And an ideal client actually makes it easier to provide the right client service model.


Enhance Your Client Service Model

A client service model is a process you create to provide adequate customer service to your clients. Your service model should create a workflow from the onboarding of new clients to consistently engaging your existing clients.

This allows you to act in a proactive, rather than reactive manner. Your client service model might include:

  • Recognition on holidays, birthdays, and milestones
  • Educational opportunities
  • Opportunities for webinars and seminars
  • Client appreciation events
  • Newsletters
  • Quarterly meeting invites

Whatever touchpoints your client service model includes, it’s all about putting repeatable processes in place. These processes help you hold yourself accountable and make all the difference between your intention of doing something and actually doing something. 

By establishing your client service model, your career will be easier and less stressful, more efficient, and ultimately, help you experience higher levels of client retention.


Does Your Firm Allow You To Focus On Relationship Building?

The problem with relationship building is all the things that go into fostering your client-advisor relationships takes time. Time that you might not have.

Working with the right firm who allows you to have this consultative focus can make all the difference. What does this look like? This might include support in:

  • Processing client paperwork
  • Preparing client strategy
  • Crafting a business and marketing plan

This means having more capacity to focus on your revenue generating activities. Being either in front of your clients or working on your client servicing.

To learn more about how Consolidated Planning’s planning philosophy prioritizes your client, talk with a team member.

Chat with a team member


2024-168493 Exp. 1/2026

Published:  February 16, 2024