Meet­ing of the Minds

As­sem­bling an ad­vi­sory board of your most can­did clients can yield hon­est feed­back and ad­vice on nearly ev­ery­thing about your firm.

Financial Planning - - CONTENT - By In­grid Case

As­sem­bling an ad­vi­sory board of your most can­did clients can yield hon­est feed­back and ad­vice.

WHAT WOULD HAP­PEN IF YOU GATH­ERED YOUR most forth­right clients and asked them for their bla­tant hon­esty? Could such an ad­vi­sory board help you iden­tify pos­si­ble prob­lems, take on new chal­lenges and build a more suc­cess­ful busi­ness?

It’s worked out that way for Amy Irvine, owner of Irvine Wealth Plan­ning Strate­gies in Corn­ing, New York. When Irvine’s cur­rent firm was just a twin­kle in her eye, she as­sem­bled a group of clients into a six-per­son ad­vi­sory board.

Irvine, who was then in a part­ner­ship, specif­i­cally wanted the board’s opin­ions about the pos­si­bil­ity of open­ing a solo firm. The group met three times in the first year, first as­sem­bling in a rented con­fer­ence room across the street from Irvine’s of­fice and then in a lo­cal restau­rant.

“Their big­gest con­cern was with all the ser­vices I was con­sid­er­ing adding,” Irvine says. “They wanted to know where the line was for me. Would I ei­ther add staff or stop ac­cept­ing new clients? How would I in­cor­po­rate new ser­vices with­out other ser­vices suf­fer­ing?”

Once Irvine had an­swered those ques­tions to the board’s sat­is­fac­tion and de­cided to open her own firm, she talked with her ad­vi­sors about how she should tell clients about the change (in­di­vid­ual tele­phone calls, the board said), and got ad­vice about ques­tions clients might ask: “What’s my backup if some­thing hap­pens to you? How does this af­fect me? Why are you chang­ing?”

Hear­ing the ques­tions from her ad­vi­sors helped her ad­dress those sub­jects in a con­fi­dent way be­fore other clients even asked, Irvine says.

After the tran­si­tion, Irvine and her board have talked about other is­sues, like how much she should charge and through what struc­ture. “They re­ally wanted me to be able to do tax re­turns for my clients,” Irvine says. So, she be­came an en­rolled agent and started do­ing client tax re­turns.

JUST LIS­TEN

It’s clear that when her board talks, Irvine lis­tens. The same is true of Kashif Ahmed, pres­i­dent of Amer­i­can Pri­vate Wealth in Woburn, Mas­sachusetts, who has main­tained a board of eight to 10 client ad­vi­sors since 2012.

A proud immigrant, Ahmed typ­i­cally wears a suit and tie. “One client said that she feels a lit­tle in­tim­i­dated be­cause I am so well dressed,” he says. “I said, ‘That’s it, no more ties for client meet­ings.’”

An­other client had feed­back about Ahmed’s web­site. Ahmed spent $5,000 to make the changes the board rec­om­mended. His board sug­gested client re­views that are lighter on the tech­ni­cal in­vest­ment de­tails, and Ahmed ad­justed ac­cord­ingly. The only ad­vi­sory board rec­om­men­da­tion he re­jected was the sug­ges­tion that he com­mu­ni­cate with clients by text mes­sage rather than by email. SEC rules wouldn’t al­low it at the time.

Ahmed is de­lib­er­ately quiet dur­ing much of the meet­ings, pre­fer­ring to let board mem­bers talk. “This shouldn’t be a time to show off or a way to get re­fer­rals,” he says.

Irvine chooses her board mem­bers for their abil­ity to be

con­struc­tively hon­est. Ahmed looks for clients who sin­cerely care about him and his busi­ness — a group that in­cludes both large and small clients.

BOARD DIVER­SITY

In­vi­ta­tions to join the board are best done via per­sonal phone calls or in-per­son con­ver­sa­tions, Irvine and Ahmed both say.

Mean­while, some ad­vi­sors may also want to con­sider the diver­sity of their boards. Con­sid­er­a­tions for gen­der, age, racial and oc­cu­pa­tional diver­sity can en­sure the voices at the ta­ble come from dif­fer­ent per­spec­tives.

“I ab­so­lutely wanted gen­der and oc­cu­pa­tional diver­sity on my board,” Irvine says. “Women have dif­fer­ent con­cerns than men, and each gen­der and oc­cu­pa­tion gen­er­ally makes de­ci­sions dif­fer­ently.”

Since, in most cases, clients will be do­nat­ing their time to serve on the board, it’s im­por­tant to thank them with food and drinks dur­ing meet­ings and hand­writ­ten thank-you notes af­ter­ward.

How big should the board be? And how of­ten should it meet? Eight clients serve cur­rently on Ahmed’s board. As at Irvine’s firm, the group gath­ers reg­u­larly to eat and talk, once a year for Ahmed and twice a year for Irvine, usu­ally at a lo­cal restau­rant. Meet­ings last for an hour or more, de­pend­ing on what the group plans to dis­cuss.

FREE-FLOW­ING CON­VER­SA­TIONS

Both Irvine and Ahmed ro­tate board mem­bers out on a stag­gered ba­sis, so that clients might serve for two or three years, but the en­tire board doesn’t turn over at the end of each pe­riod.

In ad­vance of each meet­ing, mem­bers should get an agenda to help pre­pare them for the top dis­cus­sion ques­tions, but dur­ing the meet­ing, the con­ver­sa­tion can of­ten flow freely around open-ended ques­tions. “I do most of the lis­ten­ing and they do most of the talk­ing,” Ahmed says.

Irvine and Ahmed both plan to keep their boards for as long as pos­si­ble.

“This has been very re­ward­ing for me,” Ahmed says.

Client ad­vi­sory board meet­ings “shouldn’t be a time to show off or a way to get re­fer­rals,” says Kashif Ahmed, pres­i­dent of Amer­i­can Pri­vate Wealth in Woburn, Mas­sachusetts. Ahmed is de­lib­er­ately quiet dur­ing much of the meet­ings, pre­fer­ring to let board mem­bers talk.

Con­sider gen­der, age, racial and oc­cu­pa­tional diver­sity to en­sure that ad­vi­sory board voices come from dif­fer­ent per­spec­tives.

“I ab­so­lutely wanted gen­der and oc­cu­pa­tional diver­sity on my board,” says Amy Irvine of Irvine Wealth Plan­ning Strate­gies.

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