Financial Advisor Client Retention: Getting the Best Results


By Adrian Johnstone
CCO – Practifi

As a financial advisor, finding a roster of great clients is only worthwhile if you can retain them for years to come. With churn at a minimum and a steady group of clients to work with month after month, you can perform up to your full potential.

But what does it take to keep retention rates high? There are dozens of answers to this question, as just about any interaction you have with a client will shape that person’s perception of you, your services and your firm.

Why clients stay with financial advisors

When a client decides to change advisors, the actual performance of investments isn’t always to blame. As Investopedia explained, there is more to keeping a client loyal than generating returns for them.

Often, the factors behind a broken client-advisor relationship are intertwined. For instance, when communication is weak, it’s hard to deliver a financial strategy that meets the client’s expectations or objectives. Wealth manager Bill Hammer, Jr. told Investopedia that a lack of timely contact often leads an investor to make mistakes playing the market, reflecting poorly on the advisor.

Great alignment between investors’ needs and advisors’ actions is the crux of a good client relationship — they’ll stay with people who understand them and have their specific goals in mind. You should start learning about your new clients early and never stop gathering and saving information through the years so your strategy is tailored to fit the individual’s preferences, values and objectives.

When a client relationship is clicking, the positive aspects reinforce each other. You’re communicating well and learning lots about your clients, which allows you to give ideal advice, driving better returns. Everyone wins, and the client can clearly see the value of staying with you.

Tactics for increasing financial client loyalty 

While every client relationship is different and deserves its own approach to keep the bond strong over time, there are a few overarching tactics you can use to keep your wealth management and investment advice relationships strong and reliable year after year. They include the following:

  • Target younger clients: An EY Wealth Management report offered an important reminder that while young people typically have less money to invest than later-career adults, they are firms’ future clients. Winning their approval now can set you up well for the years ahead. What does this entail? Thought leadership and coaching are good starts, creating a good reputation for your firm among young people just starting as investors.
  • Ensure review meetings are detailed, valuable — and personal: Review meetings are big moments to impress your clients and boost feelings of loyalty. This is why the Investments & Wealth Institute recommends going above and beyond with planning, so you can host meetings that contain plenty of valuable insights and make clients feel energized about their investments. Providing support that goes beyond investment advice and truly being interested in your clients as people is a related way to encourage their long-term allegiance.
  • Be realistic in setting client expectations: Throughout your relationships with clients, your promises to clients will set the tone. While it’s tempting to set grand expectations, drawing clients in with hopes for great returns, it’s better to stick with realism and common sense. Advisory firm co-founder Gregory Gallo told Investopedia that advisors who make “too good to be true” statements early in the client relationship end up losing their loyalty.

The financial advisor toolkit

Your ability to keep your clients happy, engaged and ultimately loyal will depend on both how you approach the client relationship and the tools you have access to. For example, your firm’s chosen business management platform will determine the amount of information you can bring into play in a given client interaction.

If you have high-powered customer resource management (CRM) capabilities, your access to data increases drastically, and not just regarding their investments. You can save personal information in this system for easy recall, to make sure you can connect your clients’ real interests, needs and goals with the performance of their finances.

Using technology tools designed for the financial advisory and wealth management space is a way to get beyond the surface level when dealing with client accounts. Integration between CRM, financial applications and other tools such as file management platforms gives you the ability to work in an efficient, one-stop environment. This lets you complete your daily tasks more quickly and accurately and spend more time creating value for your clients.

Client loyalty is often a matter of taking the time and effort to connect and communicate more deeply than clients expect. Exceeding their hopes and delivering a top-quality experience is a way to cultivate loyalty that can’t be won with good investment performance alone, and the right technology makes this approach easier.

Contact Practifi today to learn how the right tools can elevate your firm’s performance with clients.

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