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