Research Shows Three Reasons Clients Fire Their FA

FA Magazine (www.fa-mag.com) had a great article on why FAs think they are fired by clients.  The article was driven by a survey of 1,375 advisors.  The advisors were asked to select the top three reasons that clients fire advisors.  The top three answers:

  • Failure to communicate on a timely basis was in the top three responses by 72% of advisors.
  • Failure to understand the client’s goals and objectives with 51% came in second.
  • Failure to promptly return phone calls received was third with 44%.
  • Poor investment performance was selected by 34% of the advisors.
  • In fifth place was “making claims they can’t keep”.

I have several thoughts on these findings.

1.  The way you build a practice is to keep what you have and acquire more relationships that fit your Ideal Client Model.  The Supernova Service Model will insure you don’t lose clients because of lack of communication, understand goals and objective and failure to promptly return phone calls.  The Supernova Service Model is:

  • Monthly scheduled meetings.  It is hard not to communicate when you are talking with clients monthly.
  • Rapid response to any questions/problems/inquiries with a 24 hour resolution standard.  With this part of the Supernova Service Model you will get an “A” from your clients.
  • Multi-generational and fully implemented planning.  It is almost impossible to not understand a client’s goals and objectives when you have a planning driven practice.

2.  The top three answers are 100% under your control.

3.   Investment performance isn’t entirely under your control but:

  • Performance ranks forth in this survey.
  • Most financial plans use a Monte Carlo simulation.  The Monte Carlo simulation will give your client a probability of reaching their financial goals.  For most clients reaching their goals is more important than a rate of return.

Exercise: 

  • The article in FA Magazine tells us why clients leave – poor communication, failure to understand the client and not returning call promptly. It make good business sense for advisors to consistently deliver these things within your practice? Refine your practice to meet these standards.
  • Remind clients and prospective clients that you are delivering these three things
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