Why Do Clients Leave Their Advisors?

By Rob Knapp

Good bye word in hand
One of an advisor's biggest fears is losing an account they worked so hard to get. You spend a great deal of time getting to know someone, putting together a personalized plan and implementing it only to lose them to the advisor across the street that promises greater returns.

Why do people leave?

The number one reason cited by a survey earlier this year was 'lack of proactive client contact'. In other words, FAs aren't calling their clients on a regular basis.

My friend and colleague George was one of those advisors.

George had 350 clients. He had accumulated them over the years through hard work and diligence. They were moms and pops in Indianapolis. Salt-of-the-earth kind of people that owned farms or worked in their own start-up businesses and saved their money for a rainy day. They were the bank president, the town mayor and president of the local electric company.

He talked to them once or twice a year and even socialized with some of them. He thought they were his friends.

Until one day, a concierge-style private investment company moved into town. They told people they were going to give them proactive client service resulting in higher returns due to better risk management. They told people they would help them plan for their retirement by creating a cash flow analysis they could use to save for the future.

They told people they would be there to answer their questions whenever they called.

Guess what?

George started losing clients.

Especially the big ones that mattered. The once-in-a-life-time kind of clients that you don't want to lose no-matter-what.

George was furious! He came into my office pulling his hair and pounding his fists. "That Oxford Group is stealing my clients. We have to do something about this."

This privately held investment company had just blown our socks off!

The great thing about doing business in the United States is that entrepreneurship and competition are alive and well. They compel us to do our best or get out of the way. We needed to find a way to overcome this imminent threat to our bottom line.

And that was the first conversation that planted the seeds that grew into the Supernova Process.

I worked with George and the other advisors in my office to develop a client service model that gave the same level of service to every client. It included monthly contact with four reviews (two in person, two by phone), rapid response to client calls (one hour response, 24 hour resolution) and a comprehensive financial plan and implementation of that plan for every account. It is simple, elegant and a transparent way of doing business. Tiering is the white elephant in the room. When an advisor makes the decision to abolish it from their practice they simplify their process and improve their overall relationship with clients and prospects.

Today, industry research confirms the Supernova approach is the most effective means of retaining clients, attracting new referrals, building a powerful brand and explosive accelerating business growth. Advisors who limit the number of clients have the added bonus of work/life balance that results in a happier family life, healthier lifestyle and more energy to pursue passions and interests outside of the workplace.

In my book, The Supernova Advisor, I have outlined how this process works. We will email you excerpts from each chapter by clicking here – no obligation. If this approach is what you have been searching for to help you grow your practice consider a free 30-minute consultation with one of our experienced advisors. You can reach us by email: mailto:cindy.beuoy@supernovaconsultingllc.com?subject=Supernova 30 minute consultation.