How to retain clients

Sure, clients leave. But often, advisors have a foreboding feeling something bad is going to happen. So what can you do to avert disaster?

Warning signs

Advisors I’ve surveyed advisors gave three major warning signs:

• They don’t return phone calls
• They ignore your advice
• They complain

Other signs include: They question every fee. They designate someone else to pass judgment before acting on your advice. Can the relationship be saved? Let’s look at some scenarios.

1. Lack of attention and service

Issue: The client complains and says, “You only call when you want to sell me something.”

Action: A New York advisor changed the focus of his communication by initiating non-sales contact. He sends more educational material. This could include research specific to clients’ equity holdings and strategies. He adds additional channels such as e-mails, newsletters and mailings in addition to phone calls.

Read: Evolving client interactions

Desired outcome: The client is receiving more contact. He sees his service level has risen, and feels more like an important client.

2. A client’s spouse doesn’t like you

Issue: Most advisors have a primary contact person in each relationship. If the spouse feels ignored, he can make life difficult for your client, even persuade her to change advisors.

Read: Separate clients if they disagree on investing

Action: A Texas advisor calls when he knows the spouse will answer. He says, “We’ve never met and we need to. Maybe I’m not the right advisor for you.” He schedules a meeting in a location comfortable for both clients. He thoroughly reviews their portfolio, focusing most of his attention on the spouse. He concludes by explaining investors need to make decisions based on knowledge, not emotion, and adds, “I’ll give you enough information to make knowledgeable decisions.”

Desired outcome: The spouse feels like an equal partner in the relationship. The advisor brings both members of the couple into the decision-making process going forward, although he might delegate the authority to the original contact person.

3. Nothing seems to be working out

Issue: You have longstanding clients who have taken all your advice, but suddenly, ideas don’t seem to work out. Statements and paperwork gets lost in the mail. Phone messages vanish. They don’t indicate that they’re angry, but you sense they are establishing distance.

Read: Service audits, relationships and retention

Action: A Massachusetts advisor invites his clients out to dinner in a pleasant, neutral location. After drinks are served and food is ordered, he says: “Things haven’t been good lately.” He stops talking, and the clients respond. They get everything off their chest and voice every complaint. The advisor listens and doesn’t argue. He relates to the issue and draws them out. As the intensity winds down, he might tactfully offer his rationale. After they have finished speaking, he looks them in the eyes and says: “What can we do to go forward?”

Desired outcome: It’s very difficult for a person to say nothing or announce they are leaving when the advisor has met them face to face and given them the opportunity to vent. It’s likely they will agree on a plan to continue working together.

4. A relationship that’s already been lost

Issue: Sometimes, clients leave because they think the grass is greener on the other side of the street. Often they realize, it’s the same grass. Pride keeps people from admitting they made a mistake.

Read: Keep clients during a crisis

Action: A New York advisor calls lost relationships periodically. She explains: “I enjoyed working with you as your advisor. I realize you had your reasons for leaving. I wanted to make sure everything worked out the way you wanted. You were a very important client to me.”

Desired outcome: The advisor is meeting the client halfway and providing a face-saving way to return. The client might say: “I’ve been meaning to give you a call…” and you’ll have regained an account with minimal effort.