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Customer Advisory Board Best Practices (Financial Advisors)

Date: January 3, 2024

In the dynamic field of financial advising, every insight can propel you from the ordinary to extraordinary growth trajectories.

Are you aware that an overwhelming 86% of businesses report that having a customer advisory board (CAB) has had a significant impact on their success?

This is the essence of a client-centered strategy in action.

In this article, let’s explore how a CAB can effectively amplify your clients' voices at your strategic planning table, fostering robust business growth and heightened client satisfaction.

The Board’s Role in Financial Advisory

The customer advisory board acts as a bridge between your clientele and your service offerings, ensuring that your business evolves in sync with the needs and expectations of your clients

Some of the functions of this board include:

  1. Provide client insights
  2. Shape service offerings
  3. Enhance client engagement
  4. Build advocacy and referrals
  5. Identify market trends

Establishing a customer advisory board (CAB) offers a suite of benefits for financial advisors that can lead to sustained growth and improved client satisfaction.

Here’s a breakdown of the benefits of this board:

Deeper client insightsGain a nuanced understanding of clients' needs and desires
Enhanced client retentionIncrease loyalty by involving clients in the advisory process
Increased client advocacyTurn satisfied CAB members into promoters of your firm
Improved service offeringsRefine your services based on direct client feedback
Strategic alignmentEnsure that your business strategy resonates with client expectations
Competitive differentiationStand out in the industry by showcasing client involvement
Product and service innovationUse diverse perspectives to drive innovation
Risk mitigationProactively identify and address potential service issues
Client-centric cultureFoster a firm-wide focus on delivering client value
Validating decisionsUse the CAB as a sounding board for new initiatives
Regulatory complianceUnderstand client perspectives on regulatory changes and compliance

Best Practices for a CAB

With the basics out of the way, let’s now talk about each best practice that can help you gain a deeper understanding of how to manage this board effectively.

1. Establish Clear Objectives

Establishing clear objectives is the cornerstone of a successful customer advisory board.

This step is about laying down the fundamental goals guiding every aspect of the CAB's operations.

Here’s how to approach this:

Key ActionDetailsComponents
Define the CAB's purposeAlign goals with business strategyDetermine strategic priorities and ensure CAB objectives complement business objectives
Identify specific outcomes desired from the CABSet clear, actionable goals for the CAB and decide on the type of feedback and outcomes needed
Set measurable targetsCreate a scorecard for success metricsDecide on key performance indicators (KPIs) and develop a template or tool for tracking
Regularly review progress against goalsSchedule regular check-ins and adjust strategies based on feedback and performance

When you set clear objectives, you create a roadmap for your advisory board and a framework to measure how effective and valuable the board is to your financial advisory firm.

It's a practice that underscores the importance of strategic planning and provides a foundation for the CAB’s activities and discussions.

2. Recruit Diverse Members

Recruiting diverse members for your customer advisory board is crucial to fostering a rich, multifaceted dialogue for more comprehensive insights.

A well-composed advisory board should reflect a range of perspectives, experiences, and backgrounds.

Here's how you can ensure diversity in your CAB recruitment:

Identify Ideal Member Profiles

When assembling your customer advisory board, aim to create a microcosm of your client base that includes a broad spectrum of individuals.

The key to this is understanding the various segments that make up your clientele and then ensuring representation from each segment on the CAB.

  • Demographics: This includes age, gender, ethnicity, and location. A diverse demographic representation ensures that the unique needs and preferences of different groups are considered in your advisory services.
  • Career stages: From early-career professionals to seasoned executives or retirees, each stage brings distinct financial challenges and goals. Their input can help tailor your services to each career phase effectively.
  • Financial literacy levels: Including members with varying degrees of financial expertise can provide insights into how your services are perceived by both savvy investors and those who may require more guidance.
  • Client types: If your firm handles both individual and institutional clients, or offers specialized services (such as wealth management, retirement planning, or estate planning), representatives from these different groups can provide targeted feedback.

Carefully selecting members who represent the breadth of your client base can ensure that the CAB's insights are well-rounded and inclusive of the needs of all client types.

Outline Member Expectations

Clear communication of what is expected from CAB members is essential for the board to function effectively.

This involves being transparent about the following aspects:

  • Time commitment: Clearly specify how much time members are expected to dedicate to CAB meetings and activities. This could include regular meetings, any preparatory work, special events, or ad hoc consultations.
  • Communication: Explain how members will be expected to communicate, whether through in-person meetings, video conferences, email, or collaboration platforms. It's also important to address the frequency and nature of communication outside of formal meetings.
  • Participation: Describe the level of participation expected in discussions and initiatives. This includes not only attending meetings but also engaging in discussions, providing honest feedback, and potentially leading certain efforts or subcommittees.
  • Confidentiality: CAB members may be privy to sensitive information. It's crucial to outline confidentiality expectations and clear agreements in place.

By setting these expectations early on:

Potential members can self-assess their ability and willingness to meet these requirements, which can help ensure a committed and effective advisory board.

3. Foster Engaging Discussions

Fostering engaging discussions within your customer advisory board is key to unlocking valuable insights and fostering a sense of ownership among members.

Here are ways to encourage lively and productive conversations:

Design interactive meeting formatsRotate meeting leadershipDifferent CAB members lead discussions on a rotating basis to encourage ownership and participation
Use visual aids and interactive toolsIncorporate elements like charts or live polls to stimulate discussion and make data more accessible
Implement real-world problem-solvingPresent firm challenges for collaborative solution-finding to generate practical outcomes
Choose meeting themes relevant to membersSurvey members for topicsAsk members for input on agenda to ensure focus on relevant areas
Link themes to current eventsRelate topics to current financial events or trends for timely discussions
Incorporate workshops and breakout sessionsDesign interactive workshopsFacilitate hands-on learning and problem-solving, especially for complex financial concepts
Organize breakout sessionsCreate smaller groups for niche topics to encourage sharing of insights
Encourage open communicationSet ground rules for discussionsEstablish norms for respectful communication to set the tone for constructive dialogue
Foster a 'no bad ideas' atmosphereEnsure the CAB is a brainstorming safe space where all ideas are welcomed
Utilize facilitators to keep discussions on trackPrepare facilitatorsEnsure facilitators are informed of the meeting's objectives and can manage diverse perspectives
Facilitator's toolboxEquip facilitators with techniques to manage time and encourage participation from all members

Here are some questions to encourage engagement and ensure that discussions are fruitful:

  • For driving relevance:
    • "Based on your experience, how do you think our clients would react to this new service?"
    • "What challenges have you faced that our services could address more effectively?"
  • For encouraging diverse viewpoints:
    • "I’d like to hear a different perspective on this; does anyone have a contrasting view?"
    • "How might this strategy play out in different market conditions or client scenarios?"
  • For ensuring comprehensive feedback:
    • "What potential downsides might we be overlooking with this approach?"
    • "Can you share an example from your own experience where a similar strategy either succeeded or failed?"
  • For keeping the conversation productive:
    • "What concrete steps can we take to implement this idea?"
    • "Who will be affected by this change, and how can we best communicate it?"

By asking targeted questions and designing meetings to be interactive and member-focused, you will foster a CAB culture that is both engaging and productive.

This will not only enhance the value of the discussions but also ensure that members feel their time and input are well-respected and impactful.

4. Utilize Feedback Effectively

When you're running a customer advisory board, your members' feedback is like gold dust — it's invaluable for shaping your firm's direction and enhancing service offerings.

To make the most of it, you need a robust system to capture, analyze, and act upon this feedback.

Here's how you can do it effectively:

Implement a system for gathering insights

Implementing a system for gathering insights is critical to capturing the valuable feedback that CAB members offer.

It's about creating avenues for feedback that are both immediate and reflective, ensuring all voices are heard and all opinions considered.

  • Leverage technology: Utilize real-time feedback tools for instant sentiment analysis during meetings
  • Surveys and polls: Conduct accessible, user-friendly surveys for comprehensive post-meeting feedback
  • Interviews and focus groups: Engage deeply with members through personalized discussions on key topics
  • Documenting discussions: Capture the full breadth of discussions with detailed recording methods, beyond simple minutes

Act on member recommendations

When it comes to acting on member recommendations, it's not just about listening — it's about demonstrating through actions that their insights are creating real change.

  • Transparent action plans: Share clear, detailed plans for implementing feedback with timelines and responsibilities
  • Prioritize and pilot: Test the waters with pilot programs for the most impactful, feasible suggestions
  • Collaborative workshops: Jointly develop integration strategies with members in interactive sessions
  • Update routinely: Maintain an open channel for feedback implementation updates, keeping members in the loop
  • Recognize contributions: Celebrate and acknowledge the impactful suggestions of members in visible ways

Effectively utilizing feedback isn't just about collection and analysis — it's about creating a dynamic, responsive loop that continually evolves your firm's practices and the CAB's experience.

By following these expanded practices, you’re not just adapting to feedback; you’re engaging in a form of collaborative innovation with your most valued advisors.

5. Measure and Report Progress

As a financial advisor or coach, you recognize the significance of tracking and reporting progress, both in your clients' financial well-being and the success of your advisory methods.

When it comes to your customer advisory board, the same principles apply:

The key is to track the tangible impact of the CAB on your business outcomes and to communicate this progress clearly and effectively to all stakeholders.

Here’s how you can do this:

Track CAB's influence on business outcomesEstablish key performance indicatorsSelect metrics that align with business goals and reflect the CAB's influence, such as client retention rates and service adoption
Pre- and post-implementation reviewAnalyze performance data before and after CAB feedback is implemented to measure impact
Correlate actions to outcomesMap specific CAB-inspired actions to changes in business performance for a clear cause-effect relationship
Share success storiesHighlight member contributionsUse case studies or narratives to celebrate how CAB insights led to tangible business improvements
Regular reportsCreate and distribute reports detailing CAB's influence on the practice to members and clients
Leverage visual data presentationUse infographics and dashboards to make reports more engaging and accessible
Ensure relevance for financial professionalsContextualize within financial trendsRelate progress and CAB initiatives to current financial trends and market indicators
Align with financial planning principlesConnect the CAB's work and firm's advancements to core financial planning and advising principles

By following these practices, you ensure that the efforts of your CAB are not just recognized but are also seen as an integral part of your firm’s strategic decision-making process.

Now, as a financial advisor or coach:

It's crucial to ask the right questions when measuring and reporting progress in your customer advisory board. This ensures effective tracking and communication.

Here are some critical questions to consider:

  • Are the key performance indicators aligned with our strategic goals? Are these KPIs directly reflecting the impact of the CAB's advice on our business?
  • How does the progress we're tracking relate to client outcomes and satisfaction? Can we draw a clear line from CAB input to improvements in client services and satisfaction levels?
  • Are we effectively capturing the nuanced feedback from CAB members? Do our methods for gathering feedback allow us to understand the depth and breadth of insights provided?
  • How transparent and actionable is our feedback implementation plan? Does our action plan clearly outline how we are addressing the CAB's recommendations?
  • Are we prioritizing the right recommendations and testing them adequately? How do we decide which feedback to act on first, and are we piloting these actions to gauge their effectiveness?
  • How are we communicating implemented changes and ongoing progress to the CAB? Are we keeping the CAB regularly informed in a way that is both engaging and substantive?
  • What methods are we using to report progress to all stakeholders? Are these methods clear, concise, and accessible to all parties involved?
  • Do our progress reports include stories and examples that highlight CAB's impact? Are we effectively using narratives and case studies to illustrate the success and influence of the CAB?
  • Are we acknowledging and incentivizing CAB members for their contributions? How are we recognizing the value that individual members bring to the table?

It's crucial to ask the right questions when measuring and reporting progress in your customer advisory board to ensure effective tracking and communication.

Making the Best of the Advisory Board

Overall, a customer advisory board is invaluable for financial advisors seeking to align with client needs and drive business growth.

Ensuring clarity of objectives, embracing diversity, engaging in meaningful dialogue, actioning feedback, and transparently tracking progress are essential steps.

Continually questioning and refining your approach will keep your CAB effective and your advisory services client-centered and forward-thinking.

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