Increased AUM by 18%: Enhanced Client Communication Program

Increased AUM by 18%: Enhanced Client Communication Program

Executive Summary

Meridian Wealth Partners, facing challenges in consistent client engagement and growth, sought to strengthen relationships and unlock further investment opportunities. Golden Door Asset collaborated with Meridian to develop a personalized client communication program incorporating regular updates, customized market insights, and proactive outreach. Implemented by Sarah Chen and her team, the program yielded a remarkable 18% increase in Assets Under Management (AUM) within 12 months, fueled by heightened client engagement, increased deposits, and a surge in client referrals.

The Challenge

Meridian Wealth Partners, a growing RIA firm managing approximately $75 million in AUM, recognized a need to enhance its client communication strategy to foster stronger relationships and drive growth. While the firm provided excellent financial planning and investment management services, client communication felt inconsistent and lacked personalization. This led to several specific challenges:

• Client Attrition Concerns: While the firm's client retention rate was around 92%, Sarah Chen, lead advisor at Meridian, noted that a significant portion of departing clients cited a lack of proactive communication as a contributing factor. Losing even a few high-net-worth clients represented a significant revenue loss. For instance, losing a client with $1 million in assets under management, generating roughly $10,000 in annual fees, had a tangible impact on the firm's bottom line.
• Missed Opportunities for Upselling and Cross-Selling: The firm's inability to consistently communicate market insights and personalized investment recommendations hindered its ability to identify opportunities for upselling and cross-selling additional services. Many clients were unaware of the full range of services Meridian offered, such as estate planning assistance, tax optimization strategies, and retirement income planning.
• Lack of Client Engagement with Online Resources: Meridian had invested in a client portal with valuable resources, including market reports, financial calculators, and educational videos. However, client engagement with the portal was low, with only 30% of clients actively using it. This indicated a need for more proactive communication to drive awareness and engagement with these valuable resources.
• Inconsistent Communication Frequency: Client communication was often reactive, occurring primarily during quarterly review meetings. There was a lack of consistent, proactive communication in between these meetings, leaving clients feeling uninformed and disconnected from their advisor. A client survey revealed that 60% of clients desired more frequent communication from their advisor.
• Referral Stagnation: While referrals accounted for a significant portion of new client acquisition, the number of referrals had stagnated in recent years. Sarah Chen believed that improved client communication could help reignite the referral engine by fostering stronger client loyalty and advocacy. The firm estimated that each new client referral brought in an average of $500,000 in AUM.

These challenges highlighted the urgent need for a revamped client communication program that was personalized, proactive, and engaging, ultimately leading to stronger client relationships, increased AUM, and sustainable growth for Meridian Wealth Partners.

The Approach

To address Meridian Wealth Partners' communication challenges, Golden Door Asset collaborated with Sarah Chen and her team to develop a comprehensive, personalized client communication program. The approach was built around four core principles:

1. Segmentation and Personalization: The client base was segmented into distinct groups based on factors such as age, investment goals, risk tolerance, and AUM. This segmentation allowed for the creation of tailored communication strategies that resonated with each client segment. For example, younger clients interested in growth were targeted with content focused on long-term investment strategies and retirement planning, while older clients focused on income were presented with information on wealth preservation and income generation strategies.
2. Proactive and Consistent Communication: The program established a consistent communication calendar that included regular touchpoints through various channels, including email, personalized video messages, and phone calls. Clients received monthly market updates, quarterly investment performance reports, and periodic financial planning check-ins.
3. Value-Added Content and Insights: The communication program focused on delivering valuable content and insights that addressed clients' specific financial needs and interests. This included articles on relevant financial topics, customized market commentary, and personalized investment recommendations.
4. Technology Integration and Automation: The program leveraged technology to automate and streamline the communication process, freeing up advisors' time to focus on building relationships with clients. This included integrating email marketing platforms, personalized video messaging tools, and client survey platforms.

Specific actions taken included:

• Development of a Client Communication Calendar: A detailed communication calendar was created, outlining the frequency, content, and channel for each communication touchpoint. This ensured that clients received consistent and relevant information throughout the year.
• Creation of Personalized Video Messages: Sarah Chen and her team began using personalized video messaging via BombBomb to send welcome messages to new clients, provide updates on investment performance, and answer client questions. These personalized videos helped to build rapport and foster a deeper connection with clients.
• Implementation of Regular Client Surveys: Client surveys were conducted using SurveyMonkey to gather feedback on the firm's services and identify areas for improvement. The feedback was used to refine the communication program and ensure that it met clients' evolving needs.
• Refined Email Marketing Campaigns: The firm upgraded its email marketing strategy by using Constant Contact to deliver targeted content and track client engagement. Open rates and click-through rates were monitored to optimize the effectiveness of the email campaigns.
• Enhanced Client Portal Experience: The client portal was redesigned to be more user-friendly and engaging. Interactive features were added, such as financial calculators and educational videos. Prominent links to relevant resources were incorporated into email communications to drive portal adoption.

The strategic decision framework emphasized prioritizing client needs, utilizing technology to improve efficiency, and continuously monitoring and optimizing the program based on client feedback and performance metrics.

Technical Implementation

The client communication program was implemented using a combination of software tools and processes designed to enhance personalization, automation, and tracking.

• Email Marketing Platform (Constant Contact): Constant Contact was used to manage email lists, create email templates, and track email performance metrics such as open rates, click-through rates, and bounce rates. Email campaigns were segmented based on client demographics, investment goals, and risk tolerance. A/B testing was conducted on email subject lines and content to optimize open rates.
  • Calculation: An improvement of 5% in open rates (from 20% to 25%) across a client base of 200 resulted in 10 additional clients engaging with each email campaign.
• Personalized Video Messaging (BombBomb): BombBomb was used to create and send personalized video messages to clients. These videos were used to welcome new clients, provide investment updates, and answer client questions. The platform provided analytics on video views and engagement.
  • Integration: BombBomb was integrated with the firm's CRM system (Salesforce) to automatically populate client data and track video interactions.
• Client Survey Platform (SurveyMonkey): SurveyMonkey was used to create and administer client surveys to gather feedback on the firm's services and communication program. Surveys were conducted quarterly to track client satisfaction and identify areas for improvement.
  • Analysis: Survey data was analyzed using statistical software (SPSS) to identify trends and patterns.
• CRM System (Salesforce): Salesforce served as the central repository for client data and communication history. All client interactions, including emails, video messages, phone calls, and survey responses, were logged in Salesforce to provide a comprehensive view of each client relationship.
  • Automation: Workflow rules were created in Salesforce to automate tasks such as sending welcome emails to new clients and scheduling follow-up calls.
• Financial Planning Software (eMoney Advisor): eMoney Advisor was used to create and deliver personalized financial plans to clients. These plans were integrated with the communication program to provide clients with regular updates on their progress towards their financial goals.
• Performance Reporting (Morningstar Direct): Monthly investment performance reports, powered by Morningstar Direct, were automatically generated and distributed to clients. The reports included detailed information on portfolio performance, asset allocation, and market commentary.
  • Calculation: Investment performance was calculated using time-weighted return methodology to account for cash flows into and out of client accounts.

These tools were seamlessly integrated to create a holistic communication ecosystem that enhanced client engagement, streamlined workflows, and improved the overall client experience. All software solutions complied with SEC data regulations.

Results & ROI

The enhanced client communication program yielded significant positive results for Meridian Wealth Partners, leading to a substantial increase in AUM and improved client satisfaction.

• Increase in AUM: The firm experienced an 18% increase in AUM over a 12-month period, from $75 million to $88.5 million. This increase was driven by a combination of new client acquisition, increased client deposits, and positive investment performance.
  • Calculation: $88.5M - $75M = $13.5M increase. $13.5M / $75M = 18% growth.
• Improved Client Retention Rate: The client retention rate increased from 92% to 95%. This indicates that the enhanced communication program helped to strengthen client relationships and reduce client attrition.
  • Impact: Retaining key clients like one with $1M in AUM saved the firm $10,000 in annual fees.
• Increased Client Engagement with Online Resources: Client engagement with the client portal increased from 30% to 65%. This suggests that the proactive communication about the portal and its resources was effective in driving adoption.
• Rise in Number of Client Referrals: The number of client referrals increased by 40%. This indicates that the enhanced communication program helped to foster stronger client loyalty and advocacy, leading to more referrals.
  • Impact: A 40% increase on a base of 10 annual referrals, resulting in 4 new referrals, translating into $2M in AUM based on the average of $500k per referral.
• Higher Client Satisfaction Scores: Client satisfaction scores, as measured by quarterly surveys, increased by 15%. This demonstrates that clients were more satisfied with the firm's communication and service.
  • Metric: Average client satisfaction score rose from 75 out of 100 to 86.25 out of 100.
• Increased Client Deposits: Average client deposits increased by 10%. Clients, feeling more informed and connected, deposited an additional $3.5M across the client base.

The financial ROI of the communication program was substantial. The 18% increase in AUM generated an estimated $135,000 in additional revenue (assuming an average advisory fee of 1%), far exceeding the cost of the software tools and the time invested in implementing the program.

Key Takeaways

This case study highlights the importance of proactive and personalized client communication for RIAs and wealth managers. Key takeaways include:

1. Personalization is Paramount: Tailoring communication to individual client needs and preferences is crucial for building strong relationships and driving engagement.
2. Consistency Matters: Establishing a consistent communication calendar ensures that clients receive regular updates and feel connected to their advisor.
3. Technology Can Enhance Communication: Leveraging technology tools such as email marketing platforms, personalized video messaging, and client survey platforms can streamline the communication process and improve efficiency.
4. Client Feedback is Essential: Regularly soliciting client feedback and using it to refine the communication program ensures that it meets clients' evolving needs.
5. Communication Drives Growth: Investing in client communication can lead to significant increases in AUM, client retention, and referrals.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors uncover actionable insights and personalize client interactions at scale. Visit our tools to see how we can help your practice.