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What’s the Best Way to Keep Clients With Your Firm? Talk to Them—Regularly

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Do you communicate with your clients—and their families—regularly? And what constitutes “regular” communication anyway? Each client has different needs, so how often you communicate will depend on both the current macro environment and on his or her particular circumstances. Still, if you’re looking to keep clients with your firm, and not lose them to another advisor, it’s clear that you need to talk to them proactively.

The Truth Is in the Numbers

Let’s take a look at some recent research: 

  • Spectrem Group reports 58 percent of high-net-worth investors have switched advisors in their lifetimes, and 23 percent have done so in the past five years.
  • An InvestmentNews article reveals that 66 percent of children fire their parents’ advisors.
  • A 2014 Financial Advisor IQ article indicates that more than 55 percent of widows fire their husband’s advisor.

As you can see, merely engaging your existing clients is a short-sighted objective. There are family members to consider, and the wealth transfer process to spouses or children represents a particularly vulnerable situation for many advisors.

Tailoring Communications to Client Needs

For the short term, let’s look at your existing clients and what you can do to subtly convince them to stay with your firm—specifically, by tailoring your communication frequency, methods, and content to your individual clients. You certainly don’t need to send a personal note to every client, but segmenting clients by need is a good way to get organized.

Frequency. Needier clients who follow the market and call to check their account balances every day may need a little more attention than clients who are more secure in their long-term strategy. According to the Spectrem research cited earlier, clients who educate themselves on the market and do their own investment research are more likely to switch advisors due to lack of proactive communication.

At the very minimum, reach out to your clients annually, but also find clever ways to communicate during financially relevant events. This strategy can transform a seemingly uneventful occasion into a memorable moment and possibly an opportunity to uncover new assets. For example, consider sending a birthday card to clients turning 59½. As a follow-up, offer to review qualified accounts or retirement plans to educate them on potential in-service withdrawal opportunities.

Contact method. There are those clients who are fine with a check-in e-mail but others who would prefer a phone call. In a similar vein, there are those who will pore over every word of your newsletter and those who don’t even open it. Keep these traits in mind when planning your communication strategy.

Content. If you’re prone to sending periodic communications, don’t lean too heavily on the generic. Of course, out-of-box newsletters, canned content, and generic materials are necessary tools that allow you to stay focused on what your clients really hired you to do. But if they are the only means you’re using, you’re missing an opportunity to reach your clients on a personal level.

Get the Family Involved

Now that we’ve touched on existing clients, let’s move on to communicating with their family members. You’re probably aware that including both spouses in discussions is an obvious way of minimizing the chances of a surviving spouse taking assets to another advisor. But what about including the adult children in those discussions?

Although focusing on millennials might not be a priority for your practice, you could be missing an opportunity to retain and continue growing assets you’ve already worked on with their parents. If you wait until the estate is settled, it’s too late. Your relationships with your clients have taken time to build and deepen. Relationships with their family members will, too. You might start by showing your interest in their family’s wealth management by suggesting that your clients bring one or more of their adult children into conversations about their long-term financial and estate planning discussions.

Engage the “alpha” child. If your clients have multiple children, there is probably one who tends to take the lead on financial matters. He or she is also likely to be the trustee on any trusts, be the executor of their wills, and/or hold power of attorney. I already know that I’m the alpha child (but don’t tell my brother) and will be the one having these discussions with my parents’ advisor—and your clients already know who their alpha child is, too.

Be proactive. With an aging client base, health directives and mental capacity questions need to be addressed. Proactively seeking the appropriate family contact for these issues opens the door for discussions that could start the process of building a relationship. It’s also far more preferable to have these introductory conversations in the planning stages and not during a health crisis—your clients will appreciate the extra time you devote to addressing their concerns.

Go organic. Building relationships with your clients’ adult children can feel a lot like asking for a referral, but it’s important to remember that these relationships need to grow organically. A formal program to include clients’ children can seem hollow and inauthentic. Instead, work within your existing routines and expand from there. Consider events (e.g., educational or social) that include families, and clearly communicate with your clients on the importance of including their adult children in their financial and estate plans.

Keeping Existing Clients Happy

If you plan on being in business longer than the average expected life span of your existing clients, let me ask you this: Is it easier to keep a client or to find a new one? The overwhelming evidence shows that keeping your existing clients happy and eager to stay your clients is much easier and cheaper than replacing them. By doing so, you’ll not only retain the assets of these clients but also create lasting relationships with the next generation.

To discover how Commonwealth’s complimentary strategic in-house marketing consultants and customizable content can help set you apart, download The Art of Telling Your Brand Story.

This post originally appeared on Commonwealth Independent Advisor, a blog authored by subject-matter experts at Commonwealth Financial Network®, the nation’s largest privately held independent broker/dealer–RIA.


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