Commonwealth FAs Go Back to Class (at Harvard)

Several advisors described that they work with older, high-net-worth clients. Their associates or partners service those with fewer assets, who may require less time on an ongoing basis.

"In the future, we will go even more upstream in terms of clients and wealth," Cox says. "It's more fun, and we perform better. This makes them bigger fans for us as clients."

Still, these clients can be demanding on an advisor's time, especially if they aren't living within 100 miles of your practice, Cox says. "You have to see them a lot, otherwise they may move on."

"A delighted client is one who sees you as providing special service," explains Shapiro. Starbucks has gotten into trouble when customers felt they were not getting the experience they expected at its coffee shops. "You can't hold customers hostage, but you have to give them positive 'stickiness,' good reasons to stick with you."

Plus, you have to remind customers of your value. "Businesses think they create value. But do they truly communicate that value to customers?" questions Shapiro. "And remember, when it comes to competition, the most dangerous source of rivals are those that don't look like you, those who look different," the marketing professor notes. "This means you really have to maintain your 'difference' and increase your value to the customer."

"The value advisors provide includes helping clients find the discipline they need to stay in the market when there's heightened volatility, like today," says Jay Diamond of Investmark Financial Services in Fairfield, Conn. Also, clients are seeking more general financial advice from advisors and want to spend less time discussing investment management.

"They really see my valuable service as the advice I provide," rather than the transactions or investments made on their behalf, explains Bill Bowman, Diamond's partner.

"Sometimes they need you to give them the security to spend," says Veda Cassells-Jones, CFP, of C-J Advisory in San Jose, Calif. To help pre-retirees prepare for spending and staying within their retirement budgets, she has them practice this new spending pattern for a couple of years before they actually retire. This comes after she works out the numbers with clients and calculates or "fast forwards" their cash flows.

The need to juggle the different needs of older and younger clients is another challenge affecting advisors. And many advisors have their younger associates tackle the younger crowd.

This type of market segmentation is one of many measures that advisors are taking to better manage the complex growth of their businesses. Other steps include hiring office managers or operating officers. The ultimate aim, says Shapiro, should be to install and implement a set of management processes that insures you are achieving your strategic goals and executing appropriately.

Commonwealth Chairman and CEO Joe Deitch acknowledged that this is no easy task, but urged advisors to grab the baton and run with it. "We know advisors can be pro-active with customers, but they also need to be pro-active with staff to help them become future managers and business owners."

Advisors say that, after the "break" of attending the Commonwealth chairman's retreat, they're ready to get back home and execute. "The conference really has me thinking more about how to change my business organization and management," says Chuck Bean of Heritage Financial in Norwood, Mass.

Commonwealth staff members — like Deitch, John Rooney, managing principal of Commonwealth's San Diego office, and practice-management vice president Joni Youngwirth — are there to facilitate this change. "The financial advisor is operating like a small-business owner, who needs help with scale and process," explains Rooney. "This event is good, because it shows us what issues are most important for us to be focusing on in concert with our advisors."

For Jim Ball of Ball Financial Services in Westborough, Mass., and other advisors, the real work lies ahead. "It's all about customer service and management," explains Ball. "This is a tough line to walk. If you want to grow, you have to have both skill sets and develop them in your practice."

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Janet Levaux is the managing editor of Research; reach her at [email protected].