Creating Virtuous Circles

A virtuous circle is defined as

‘a chain of events in which one desirable occurrence leads to another which further promotes the first occurrence and so on resulting in a continuous process of improvement’

If you are responsible for the successful operation of a growing private client team and you currently proactively engage your existing clients, you probably have a virtuous circle.

If you do not currently engage them, please read on, this piece may stimulate some ideas

Existing Private Clients

Your existing clients have engaged your firm because they were motivated to take control of their affairs. You helped them with whatever technical requirements they had. Both parties to the transaction created a desirable outcome – they were in control of the situation.

But, then what happens?

The client’s life moves on and their situation changes. Many of your clients are in one of two states:

• Procrastination: they understand they should make changes but have not got around to it
• Ignorance: they have no idea that they should update their affairs in order to regain control

They no longer have the control they sought from engaging with you.

Your Firm

Undoubtedly provides an excellent service when helping your clients to take control of their affairs.

But, then what happens?

Your fee earners move on, servicing more clients and generating fees. Inevitably they are too busy to dedicate time to anything beyond their primary objective. In the absence of a support function there is an inevitable outcome:

• Relationships between the parties elongate and sometimes snap.
• Information held on existing clients becomes outdated. Its value degrades quickly

The control that the firm would like over their existing clients is no longer there

Vicious Cycle rather than Virtuous Circle

The loss of control experienced by both client and firm is the opposite of a virtuous circle. It’s a vicious cycle:

• Clients are vulnerable
• Partners and fee earners are working hard to secure, on board and service ever more new clients
• The value of a firm’s existing clients is diminishing.
• Existing clients are not being served

From the high point, desirable outcome, the vicious cycle leads those same parties to a point where they are both losers

Breaking the Cycle

As that famous Mr Einstein explained about the definition of insanity, something must be changed.

We suggest:

1. That firms have a duty to their existing clients to ensure they are not ignorant of the impact of change. Firms can and should provide simple to understand, engaging and informative communications on a regular basis
2. Clients need to be stimulated out of procrastination. It can be argued that the firm should take responsibility to do this as it is highly likely to result in additional fee income
3. Taking proactive action to do point 1 and 2 ensures that the client relationship strengthens
4. And that, as a result of these actions, the asset value of the client willbank is enhanced

This, many of you will agree, is fine in theory. How can this virtuous circle be made to happen?

The key for most firms is investment in the resources needed to allow fee earners to maximise time on their primary outcome – seeing as many clients as possible. Those resources must have the skills and experience needed to proactively engage the existing clients. These include:

• Getting and keeping information updated over time
• Designing and delivering innovative and informative content that generates action
• Breaking through client procrastination

If done correctly the investment will yield compelling returns from a financial perspective. It will help the firm to stand out for the quality of its service and it will replace a vicious cycle with a virtuous circle.

Again, you may say, fine in theory. In practice are these resources best brought in house or could they be outsourced?

WBT provides a distinctive outsourced model where we work on the firm’s behalf. We deploy a combination of technology and good, old fashioned, customer oriented humans to proactively engage high priority existing clients.

We adopt the firm’s tone when communicating and ensure that the firm stays in control of both its data and the rate that new work is generated from existing clients. Our model ensures you generate tangible returns from your existing clients from the start of our engagement.