What’s The Real Reason Clients Fire Their Advisor?
There’s been enough research done for us to know what clients look for in an advisor. They want unparalleled service, a trusted relationship, and the confidence of knowing their money is in good hands, no matter what life throws their way. But as an independent financial advisor, you want to not only excel at the things that attract clients but also do what’s necessary to retain them. After all, research shows that the work involved in attracting and onboarding a new client is anywhere from 5 to 25 times more costly than retaining the clients you already have. (1)
So, what’s the secret to avoiding the dreaded “break-up” email or phone call from your clients? Communication. Just as communication makes or breaks a romantic relationship or friendship, it’s also the deciding factor in whether a client will leave their financial advisor.
Communication Communicates Care
Just as a recap, here are some reasons why clients choose to work with a particular advisor:
- 47% say it’s because the advisor is trusted.
- 39% say it’s because of the personalized service they received.
- And 28% say it’s because of the general quality of customer service offered by the advisor. (2)
It makes sense, then, that service plays a role in why clients leave. But the idea of great service is pretty vague, so let’s break down what clients really mean when they say they want more communication.
Frequent Contact
No one wants to be courted by an advisor and then have nothing but radio silence once your money transfers over. That’s why 30% of investors think that lack of communication is a valid reason to change advisors. (3) In general, people aren’t picky about how they get that communication; they just want to know that they are more than a number on a spreadsheet. The expectations for personal interaction is also changing with the generations. According to millennials, 31% want more contact with their advisors, while only 7% of older generations feel this way. (4)
For advisors with a significant book of business or those just starting out with very little help and support, there’s just not enough time in the day to invest in developing relationships with your clients. That’s why it’s worth it to delegate some of your duties so you can get back to giving your all to your clients instead of stretching yourself too thinly.
Proactive Communication
Your clients are busy. In fact, that’s one of the reasons they hired you in the first place. They wanted to offload some of their financial burden, relying on someone they trust to oversee multiple aspects of their financial lives. If they don’t hear from you and have to track you down themselves, that’s just adding hassle to their already full lives.
When you set up your best practices, be sure to find out what your clients want from you in terms of communication, and then set up workflows to make that happen. A Vanguard-Spectrem study tells us that 93% of ultra-high-net-worth investors want their advisors to reach out to them, either quarterly (35%) or monthly (32%). (5) Whether through face-to-face meetings, publishing valuable content, using technology to streamline your communication, or taking advantage of social media to connect with your clients, you have no lack of resources to make proactive communication a reality.
Personalized Communication
How many form emails or letters do you receive? Do you toss them in the recycling bin right away or pore over every detail? Your clients don’t have a lack of information problem, they have a lack of personalized information problem. And you are perfectly positioned to solve this dilemma for them. By developing a personal relationship with your clients, you create a foundation from which you can give them advice and services that truly transform their lives. Another perk to building your business on relationships is it allows you to make every interaction unique to your clients and aligned with their goals.
If you know your clients want you to do the technical work so they can live their lives, using up your face-to-face time to pore over pie charts and stock market trends is going to fall flat. Get to know your clients and what makes them tick, and then use that information to provide them with superior communication that meets their needs.
Do You Have Communication Problems?
Losing your clients is not an option. You put your heart and soul into building your business and bringing clients into your firm’s family, so don’t put that at risk by not having a plan for client communication. If it all seems overwhelming to you, Freedom Wealth Alliance is here to help. Learn more about our firm’s distinctive advantages and how we can help your firm provide superior client service by visiting www.explorefreedomwealthalliance.com. You can also email us at krozman@freedomwealthalliance.com or call Kurt Rozman at 262-798-7979.
About Freedom Wealth Alliance
Freedom Wealth Alliance is a Registered Investment Advisor providing a home and multiple affiliation options for financial advisors seeking business growth and/or succession planning, operational excellence, and turn-key placement. We created this firm to relieve your stress no matter the stage of your firm. We take the burden of running the business off your back, so you can spend your time doing what you do best and love the most. If that means spending more time with clients and prospects, you can. If that means spending more time with your family, just do it. Visit www.explorefreedomwealthalliance.com and sign up for a free account to access all the tools and resources we have developed to help you transition to true freedom and business ownership.
For Investment Professional Use Only
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(1) https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
(2) https://www.qualtrics.com/customer-experience/financial-advisor-report/