It happens at some point in almost every business: a client leaves. Sometimes it’s because of factors beyond your control such as clients who relocate to other parts of the country. But some clients may be dissatisfied with your service.“Competition is today fierce,” said Sylvia Garibaldi, principal and founder of SG & Associates, a Toronto-based financial services consultancy, and president of Advocis Toronto. “There are about 90,000 individuals offering financial advice in Canada today, and poaching goes on all the time. You need to be on top on your game – the first person who comes to a client’s mind for all important life events and decisions. And you should know when these occur.”
The nature of competition has changed dramatically, added Steve Ison, principal and area leader for Western Canada at Edward Jones. “For decades, value for clients meant someone who would contact them from time to time about interesting new products. Today, anyone can buy products from a teller or on a computer. Value is now rooted in a deeper understanding of clients’ needs and circumstances, and solutions that are tailored to those needs.”
He said a holistic financial plan, created after a thorough know-your-client process, is the basis for building client loyalty. “The financial plan has to focus on the needs, the goals and the financial circumstances of the individual family or client, putting the client’s goals in a reasonable order.
“But that’s the just the beginning,” he added. “Financial advisors who are successful in building life-long clients are in frequent contact with them. They need to schedule a series of review meetings throughout the year at which they review the financial plan, discuss the client’s attitude to risk and how that relates to the existing portfolio, and find out what the client expects of the advisor and how often he or she would like contact.”
The No. 1 reason clients leave their financial advisors is lack of communication, Garibaldi said. “This includes the number of times they are contacted throughout the year, how they are contacted, and disclosure of your fees and the way you do business.”
With A clients, she said, “you will want to touch base at least 20 times a year through your monthly e-newsletter, social media such as updating your LinkedIn profile with interesting articles, client meetings and client appreciation events.”
B clients will need a minimum of 15 touches a year, she added. “Keep in mind that B clients can eventually become A clients, and they are often deeply plugged into community networks. And your C clients should get at least six to eight touches a year.
“You’ll also need to know what kind of touches your client wants,” she said. “Connect with all your clients who are on LinkedIn, but keep in mind that your older clients will probably appreciate the personal touch of a phone call or a letter. A twenty- or thirtysomething client, on the other hand, may consider a phone call an intrusion and want to be contacted by email or through social media.”
All your clients should have at least one fact-to-face meeting with you a year, Mr. Ison said, “although when I was a financial advisor, my working professional clients were usually so busy that it was difficult to see them face-to-face. A solution often was to visit their offices.
“If advisors don’t keep in contact with their clients,” he added, “these people will eventually run into another advisor who will say, ‘This is how my business works…’ ”
Garibaldi believes client surveys are useful in getting to know clients at a deeper level. “These can take the form of about 10 or 12 general interest questions about hobbies and interests, clubs and organizations the clients belong to – which could be a good segue into referrals; why they decided to work with you and whether you have lived up to their expectations; and what they think of your competition. This last question will tell you whether the client has been approached by other advisors or firms, or is looking around.”
She suggested following up the survey by telephoning clients who have answered its questions and thanking them for doing so. “Schedule meetings with those whom you think have concerns,” she added. “Listen to what the client is telling you, and remember that a silent client is not necessarily a satisfied client.”
If a client announces that he is taking his business elsewhere, view this as an opportunity to learn from your mistakes, Garibaldi said. “Always ask why the client has decided to leave. ‘Was I hard to get hold of?’ If one client is experiencing this, changes are others probably are well. And some departing clients won’t tell you themselves; they’ll let the new advisor send you the paperwork. But give them a phone call too. Some advisors try to show departing clients all they have done for them, but I don’t recommend putting this kind of pressure on them to stay. Tell them you’re always open to them coming back…that is, if you want to retain them as clients.”
It’s important to act in a professional manner in this kind of situation, Ison emphasized. “The vast number of people are uncomfortable with conflict, so when you are asking for feedback of why the client is dissatisfied, you will need to put the blame on yourself and not on the client. ‘Where did I go wrong? What do I need to improve?’ In rare occasions, a misunderstanding may come to light that can be resolved, but this does not happen very often.
“No matter what the client’s attitude is, be professional,” he added. “Our industry is based on professionalism and maturity and integrity are its cornerstones. We have to hold ourselves to these standards.”