The Importance of Gift Giving for Financial Advisors

For service-based sales professionals in any industry, gift giving is a great way to go above and beyond to show your gratitude. When it comes to retention, a little thought can really count, especially when your ideal client relationship lasts decades.

Financial advisors fall into the category of professionals who want their clients to stick around as long as possible. If they decide they want to give gifts, they will face an above average amount of regulatory scrutiny. According to Reuters:

“…Gift giving, no matter the value or recipient, must be free of conflicts of interest, favoritism and lack any future obligation of the client or advisory representative.

To meet these standards, a firm must employ a well-defined plan or policy that includes the definition of a gift, sets monetary limits, a clear approval process and educates it advisory representatives.”

It’s a pretty straightforward policy that doesn’t really prevent the practice, it just simply ensures it remains ethical.

The trick for financial advisors is making sure their gift giving method is cost effective. Books make great gifts, but they require a lot of knowledge about individual clients. There are more universally appealing gifts like wine or maybe non-perishable food, but they might not have a huge impact.

There is a growing trend among service-based sales professionals to give the gift of an experience. Maybe some kind of day trip or hobby-related adventure. This unfortunately doesn’t work well for FAs, because currently, according to FINRA, advisors can only spend a hundred dollars per client per year. It’s hard to provide an awesome experience to your best clients when you only have a hundred dollars for your budget.

The most important thing about any gift you give is that it makes an impression.

Sounds easy, right? The idea is simple, but taking action on it is time consuming. Financial advisors already wear a lot of hats. They have a lot to handle when it comes to drumming up new clients and generating returns for the clients that they already have. They might not feel that they have the bandwidth to research and deliver a truly thoughtful gift to every single one of their clients.

Here are some simple ideas advisors can use for inspiration:

  1. Sporting Events/ Entertainment: Getting a client tickets to one of his or her favorite teams’ games is sure to be a hit. If they’re not into sports, consider some kind of experience they’ll enjoy, maybe a lecture, stand-up comedian, or play/musical.
  2. Wine & Spirits: For many people, you just can’t go wrong with a nice bottle of their favorite booze.
  3. Light Luggage: A nice computer bag is so useful, that clients will never forget the who gave it to them.
  4. Books: If you can understand the reason they’re putting together a portfolio, chances are you know what their goals are. Try to find a book that they can read to educate themselves.

If you want something even simpler than the ideas listed above, ReminderMedia does offer a turnkey solution that is simple and a regulatory breeze. American Lifestyle magazine is a piece of marketing that strikes recipients like a gift. The magazine is proven to drive ROI according to a GfK Reader’s Survey:

  • 40% of recipients have referred friends and family to the professional who sent them ALM.
  • 53% of recipients have conducted repeat business with the professional who sent ALM.
  • 79% of recipients appreciate the professional more because of receiving ALM.

You give something thoughtful to the people that matter most to your business, driving top-of-mind awareness and referrals. American Lifestyle magazine lives in the home for weeks at a time, and spreads joy throughout entire families.

No matter what kind of gesture you choose, remember, when it comes to earning new business, it is always better to give than to receive.

Written by Sefton Eisenhart

A writer who deeply believes that everyone is in sales.