Valentine’s Day Relationship Advice: 7 Reasons Clients Break Up with Financial Advisors

According to PriceMetrix, the average financial advisor will lose 10 percent of his or her clients every year. That’s a big chunk of investors and income that you, we assume, would rather keep around.

So, in the spirit of Valentine’s Day, we’re taking a look at seven reasons why clients break up with their financial advisors—and how to prevent it.

Break Up Reason No. 1: The Relationship is Too Hard

Are you making it easy for investors to work with you? 

Relationships — even those between a financial advisor and his or her clients — shouldn’t be a chore, especially at the beginning. They should be fun, exciting, and full of butterflies.

So if your account creation process is a pain, you’re also establishing early on in the relationship that things are not going to be easy. That’s not a good signal to send if you want the client to stick around long term.

Finding ways to make the process easier such as going paperless by offering a completely digital experience can help speed up the onboarding and account creation processes, as well as show that you are ready to meet their needs in this modern world.

Break Up Reason No. 2: Lack of Communication

One of the cornerstones of a healthy, thriving relationship is open communication. 

After onboarding, you most likely are conducting traditional annual sit-down meetings with your clients. But are you keeping the conversation going and the information flowing all year long?

In today’s crowded wealth management world, a client portal where investors can check their portfolio and track progress toward goals is the standard. You have to go beyond the client portal. 

Look into automated event-based notifications that send out emails and/or text messages to your clients to recognize pre-determined milestones and activity. For example, send a note to thank them for their business on the anniversary of becoming your client or alert them when their portfolio has been rebalanced. Any and all communication will help keep you top-of-mind. 

Break Up Reason No. 3: You’re Never Around

Even the healthiest, easiest relationships require you to invest a lot of your time.. And you have other things going on in your life. Your investor relationship is no different. 

You have a lot on your plate. There are a number of back-office tasks — from reporting, billing, compliance, and more — that are critical  to running a successful business. But when you’re stuck doing those time-consuming, mundane tasks, you aren’t able to focus as much on your investors.

How do you make sure all of those important things are getting taken care of while still leaving you enough time to communicate with your clients, rebalance portfolios, report on performance, and everything else you need to do as an advisor? Streamline your operations and find ways to automate back-off processes will free up a lot of time and give you the added benefit of helping you get paid quicker, access accurate data in real-time, and be audit-ready all the time.

Break Up Reason No. 4: You Don’t Care About Their Goals

Being supportive of your companion and their needs, wants, and goals in life is important in a thriving relationship.

Do you know your clients’ financial goals or are you only focused on their investments?

Financial planning can be a big differentiator in the financial advisory world. According to industry thought leader Michael Kitces, citing Cerullli, nearly 50 percent of financial advisors call themselves “financial planners,” meaning they offer a full range of planning services, such as savings goals (retirement, college), budgeting, tax planning, and insurance. Yet, in reality only 24 percent of them actually provide those planning services.

Helping your clients create actionable plans and then guiding them through the steps to make their aspirations a reality makes your advisor-investor relationship a lot stronger and more sticky. Just think about how memorable and irreplaceable you could become by helping a client save for their first house?

Break Up Reason No. 5: Lack of Understanding

Sharing the depths of your soul and really letting your companion see what you are passionate about is a big part of a relationship.

When it comes to your clients, do you know what makes them tick? 

Today, clients are demanding more portfolios personalized based on their individual tax management needs or personal ethics. For example, your client may want to avoid alcohol company securities or invest only in companies with female CEOs all the while making sure Uncle Sam takes as little as possible. 

This kind of hyper-portfolio-personalization used to only be available to high-net-worth clients. But technology makes it possible to deploy tax management strategies and use ESG screenings and sector and industry restrictions for all of your clients at scale.

Get to know your clients’ individual needs, and you’ll be hard to dump, especially with younger clients. Ninety percent of Millennials want to allocate to responsible investments in the next five years. And every investor across the generations has to deal with taxes.

Break Up Reason No. 6: You Don’t Make Them a Priority

Just think of all the relationships that have been doomed because of a forgotten birthday or anniversary. Of course, something small like that is usually a symptom of a greater problem: prioritizing your companion.

Client relationships can work the same way. Over time, if you don’t make clients  a priority or make them feel like they are a priority, they will leave. 

How can you make them feel special and appreciated? By focusing on the client experience — from easy-to-understand statements and proposals to lively meetings that include dynamic reports in the form that they prefer.

Client experience goes a long way toward your success too. McKinsey & Company reports that businesses, including advisory firms, focused on the customer experience have a revenue growth rate five times greater than those that don’t.

Break Up Reason No. 7: You Aren’t Giving Enough

For relationships to thrive, you have to put forth a lot of effort and emotion. Of course, there’s a payoff for all of that work in the form of happiness.

Your investor relationship is no different. If you aren’t giving enough to the relationship, your client isn’t going to feel like you are providing enough value for the fee they are paying you.

So how do you increase advisor alpha and prove that you not only care about but also are working to help their financial health day in and day out? Engage clients with a complete financial education, such as teaching them how to weather market movement or make a monthly budget.

All of these efforts help your clients make better financial decisions on a whole, which then help you fulfill your fiduciary responsibilities. It’s a win-win relationship.

Strengthen Your Client Relationships

Want to make sure you aren’t giving your clients any reasons to break up with you?

A turnkey asset management program (TAMP) offers advisors a complete technology and investor solution that addresses all of the typical break up reasons.

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About Angie DiSalvo
Angie DiSalvo is a Marketing Content Strategist at Orion headquarters in Omaha, Nebraska. A former sports copy editor, designer, and sometimes reporter at the Colorado Springs Gazette and Des Moines Register, Angie uses her journalism skills to carefully craft content that helps financial advisors while also trying to use every constellation, star, and space pun possible. You can usually find Angie playing video games, drinking Earl Grey tea, and dreaming about her next Disney family vacation.