Skip to main content
Financial Advisors

Financial Advisor Client Retention Strategies in 2020

By September 1, 2020No Comments

Wealth management is not a stagnant profession. Services evolve as the wants and needs of clients change. Client retention is dependent upon how well financial advisors adapt to those changes. At no point in recent history has this been more apparent than in 2020. In this article, we’ll discuss some essential financial advisor client retention strategies to help you hang on to more of your current clients and offer long-term value.

Struggling to retain clients and grow your practice? Consider working with an experienced financial advisor coach from Northstar Leadership Solutions. Request a free consultation.

Retention Tip #1: Embrace Technology

Older clients may prefer to meet in person. The new generation wants online engagement. There’s no point in fighting it. The most successful advisory firms in 2020 are those that have embraced technology, using client portals and video conferencing in lieu of lunches or in-person meetings.

This doesn’t mean you can’t do client lunches. There will always be clients who prefer the traditional face-to-face. The adjustment here is to provide technology options for those who want them. It’s all about meeting clients where they’re at.

One of the most common pieces of advice we offer to financial advisors is to ask clients how they prefer to communicate. In the new world, you must have a virtual option. Savvier firms actually encourage online communication over personal meetings. It’s more scalable and absolutely essential in the wake of COVID-19.

Retention Tip #2: Inquire About and Emphasize Your Value

Ask your clients if they are benefitting from your professional advice. Don’t assume that they are happy because you don’t hear any complaints. That’s how client relationships deteriorate. Reach out, ask questions, and make adjustments as needed.

The second part of this tip is to emphasize your value to clients whenever you communicate with them. If your inquiries yield positive input on your investment returns, focus on those. If service is more important to a client, make sure service levels meet or exceed current standards.

Like any long-term relationship, being a financial advisor will have its highs and lows when it comes to client interaction. By understanding what your clients appreciate about your services, you can better keep them focused on what you bring to that relationship.

Retention Tip #3: Prospect for High Net Worth Clients

This is not about the money. Sure, the fees are higher in the HNW space, but the real value is in the retention rate. According to a study released by ThinkAdvisor, households with less than $250,000 in assets have a lower retention rate than those with more assets. In other words, prospecting in the high net worth space can result in longer-term relationships. They’re simply more likely to stay with you through market ups and downs.

Another advantage to managing high net worth clients is that they tend to have a better understanding of how financial markets work. With more than a million dollars on the line, they select their advisor carefully. If you sell them in the beginning, they tend to stay.

Retention Tip #4: Expand Your Service Offering

The “need for more” is one of the most common reasons clients leave advisors. If wealth management is the only service you offer, there are competitors out there willing to do that and provide financial planning, tax preparation, etc. Consider adding addition services to your menu to keep your clients happy and keep up with the competition.

The average client in 2020 does not want to hire multiple financial professionals. Your relationship with them is a at risk each time they reach out to someone else to secure a service you don’t provide. It will happen often unless you expand your service offering.

Retention Tip #5: Become the Center of Influence

There are some services you may not be able or willing to offer. That doesn’t necessarily mean you’re out of luck. One key financial advisor client retention strategy is to outsource when you need to. Work on building a network of professionals that you can refer clients to when they are in need. The list should include, among others, accountants (if you don’t have one at your firm), mortgage lenders, and legal services.

The idea here is to become the “go-to” person for your clients for any issue where they’ll need professional services or advice. Done properly, these professional relationships could also become a good source of new leads for you. Seek out partners you can work with.

Retention Tip #6: Communicate Regularly

Communicating with your clients regularly keeps you top of mind and instills confidence that you will be there when they need you. The frequency of your communications should be based on client needs. Some need weekly emails. Others could be happy with monthly reports.

Determining communication frequency can only be done by interacting with the client. Executing those communications should be handled by technology. Look for reporting and marketing tools that can send automated emails. Those will be especially helpful as you scale.

Retention Tip #7: Hire a Financial Advisor Coach

These financial advisor client retention strategies should be helpful to most firms, but each firm is unique. Our final retention tip is to ask for help. If you’re struggling to retain clients or to grow your business, consider hiring a financial advisor coach. Contact Bill Edmonds today at Northstar Leadership Solutions to request a free consultation.

Schedule Call