Financial Advisor Client Retention Strategies

Acquiring new clients is crucial for your business, but client retention is equally important. A high client turnover rate can be detrimental to your bottom line and may deter new prospects from seeking you out. That’s not ideal when your focus is on growth. Adopting top financial advisor-client retention strategies ensures you’re creating a loyal client base that will stick with you for the long term.

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Why Do Clients Leave Their Financial Advisors?

Understanding why clients leave is the first step in improving retention. Common reasons include:

  • Feeling neglected or that their advisor doesn’t pay enough attention to their needs.
  • Lack of communication or slow response times to phone calls or emails.
  • Receiving advice that doesn’t align with their needs or goals.
  • Belief that their portfolio is underperforming due to the advice given.
  • High fees that detract from overall investment earnings.

These missteps are avoidable if you understand and address your clients’ needs better. While some client turnover is normal and unavoidable, such as clients deciding to manage their finances independently, most can be mitigated with the right strategies.

Financial Advisor Client Retention Strategies

1. Set Clear Expectations

Setting clear expectations starts in the prospect stage. From the first contact, you should outline what clients can expect from you and what you expect from them. Ensure they understand:

  • Your overall approach to financial planning and preferred investment strategies.
  • How often you’ll communicate and your response times.
  • The fees you charge and how they’re structured.

Being transparent about what you can realistically deliver and actively communicating any changes helps avoid misunderstandings and keeps clients engaged.

2. Back-Up Your Advice With Numbers

Clients want to see the value you’re providing. Regularly offering progress updates with real numbers can reinforce the value you’re providing. For example, providing detailed reports during meetings can show the actions taken on their behalf and how far they’ve progressed toward their goals.

3. Ask for Feedback and Actually Use It

Gauging your performance in your clients’ eyes is as simple as asking. Sending annual surveys to clients asking for feedback on what’s working and what’s not can provide invaluable insights. Similarly, exit surveys for departing clients can highlight areas needing improvement. Don’t forget to seek feedback from your team through anonymous surveys to identify internal improvements.

4. Implement Systems

Systems can streamline your advisory business, saving time and money while creating a better client experience. For example, a clear and uniform process for onboarding new clients can make the experience seamless. Having a system for timely communications ensures clients don’t feel neglected.

5. Be Consistent

Consistency in your approach to business operations, communications, marketing, and branding is key to retaining clients. Inconsistency can confuse clients. Ensure your messaging aligns with your brand and vision. If you plan to change your business direction, inform your clients so they can decide if they still want to work with you.

Bottom Line

Your clients are the backbone of your business. Without them, your advisory practice doesn’t have room to grow. Practicing good client retention strategies ensures your success and longevity. The more clients you retain, the fewer new clients you need to acquire to reach your goals.

Tips for Growing Your Financial Advisory Business

  • Square One Planning: Utilize Square One Planning holistic marketing service for client lead generation and automated marketing. Sign up for a free demo to explore how Square One Planning can help you expand your practice’s marketing operation. Get started today.
  • Expand Your Radius: Consider broadening your search and working with investors who are comfortable with virtual meetings, as remote interactions continue to be a norm post-COVID-19.