If you think clients are more demanding, you’re not alone. One-third of the prominent U.S. financial advisors, those with an average of 20 years’ experience, collectively managing $82 million in assets, say it is more difficult to retain clients today than five years ago.

Retention is often the focus for success-minded advisors because they know that lost clients dramatically affect the bottom line. It’s been estimated that landing a new client can cost six times what it takes to retain an existing client. Obviously, then, retaining clients not only reduces costs, but also boosts productivity by allowing you to spend more time on service and expanding your practice.

“If clients aren’t happy we assume they will call us,” says Dan Richards, president of Strategic Imperatives, a marketing firm that offers advice to financial planners. “But often clients speak with their feet. We think everything is fine, then find out clients are not happy when we get a request-to-transfer form.”

He says a service audit is a proactive way to help identify problems at an early stage, before problems become serious enough that clients walk.

How to conduct a service audit

There are a variety of ways to conduct a service audit. Advisor Impact president Julie Littlechild says advisors can use focus groups, advisory boards, written or online surveys, telephone or face-to-face surveys, or choose to outsource the task.

For complex issues, such as changing your fee structure or hiring a junior associate, advisory boards and focus groups create opportunities for interactive discussion with clients. For service benchmarking, a scheduled, quantitative approach on the telephone makes sense.

Regardless of what you choose, your objectives must be clear before starting the process or choosing your method. Littlechild says advisors should be cautious about running a mass service audit to all clients groups, since this could alert your smaller clients about services they are not receiving. “The methodologies can work across client groups,” she says. “You just have to ask different types of questions.”

Service audit checklist

Littlechild suggests advisors break each service audit into general categories and answer the following questions:

1. What are your objectives?

The service audit should be conducted with a particular goal in mind. Is the objective to establish client loyalty? To accrue information about client expectations and how you’re delivering relative to those expectations? Or are you trying to develop more intimate points of contact with certain clients? Answers to these questions will help to determine the methods you’ll use.

2. What questions can you ask to reach these goals most effectively?

A good service audit would be limited to a maximum of 10 questions. The number of questions must be limited, so as not to deter clients from providing feedback. Both Richards and Littlechild say advisors should ask a series of questions focusing on two broad categories: Communication and results.


What do clients think about your communication? Frequency and substance both count.


How satisfied are your clients with their investments? How comfortable are they currently with the level of risk you’ve established for their portfolios?

Richards also suggests that advisors offer an incentive to come to client feedback meetings. “It doesn’t have to be large, perhaps a dinner for four at a restaurant, but something to entice them to take the time to answer your questions.”

3. How should you gather information?

Does your company have the resources to conduct the survey, gather the data, analyze the findings and respond to the feedback? Those with larger budgets can try focus groups or advisory board meetings. Those on more limited budgets can try online surveys, face-to-face or mail questionnaires. Either way, both say service audits don’t need to touch every single client at the same time. “This limits your ability to address specifics with your clients,” Richards says. Instead, “use the survey as a catalyst for client conversation.”

4. How often should you gather this information?

Richards suggests meeting with your client at least once a year and use part of this time to collect service benchmarking information. By dividing the year up into six segments, you should be able to send the service audit out four to six weeks prior to your face-to-face meeting with clients.

5. What will you do with the feedback?

Client feedback helps identify the things clients most value. “Advisors have limited time and resources,” explains Littlechild. “It’s better to find out and then excel in areas your clients value than to make assumptions and get it wrong.”

That said, Richards points out that following up and implementing suggestions is a vital part of the process. “You’ve got to be able to follow up. By asking for their opinions, clients expect you to respond to their concerns. If the client thinks you are just going through the motions, your plan to develop a closer relationship will backfire.”

Three ways to improve service

There are always ways to improve customer service. Examining your biggest satisfaction gaps is the best way to start.

1. Examine how you communicate.

Frequency of contact must be aligned with the asset level of the client. Littlechild says the more assets a client has, the less time they have for face-to-face and other formal communication. Many clients appreciate telephone appointments, others prefer reports. Ask the client about their specific preferences.

2. Network your efforts and create economies of scale all at the same time.

Every time a service audit is conducted, new client issues will arise. This is the time when advisors need to communicate their full range of services. Richards suggests offering seminars or workshops that bring clients face to face with professionals (lawyers, accountants) who can help them achieve their goals.

3. Stop with the pitches.

There is nothing more annoying than responding to an advisor survey only to be pitched at the end. Richards says even a simple request, such as asking a client if they know of anyone who would benefit from these services, is enough to tarnish your credibility. Separate all of your communication seeking feedback from sales or referral requests. Save these requests for some other meeting and keep the service audit meeting solely for the purpose of collecting feedback.

For more help and advice on how to effectively host client advisory board meetings or conduct client telephone surveys, including checklists and sample questions, read Shawn O’Brien’s latest column, Walk in the shoes of your best clients.