Loyal clients are key to a successful financial advisory practice. Those practices that have loyal clients are more profitable, partly because it costs more to find new clients than to keep existing ones.
But building client loyalty takes time and perseverance.
“It doesn’t happen overnight and it matures over time,” says George Hartman, managing partner with Accretive Advisor Inc. in Toronto. The seed must be planted early in a relationship, he adds, in order to build trust and credibility.
Adds Prem Malik, financial advisor with Queensbury Securities Inc. in Toronto: “You must be able to add real value to the relationship, which will in turn foster loyalty.”
The following are six tips to help you build client loyalty:
1. Manage expectations
Make sure you’re clear about what your clients can expect from you.
“Do what you say you’re going to do,” says Joanne Ferguson, president of Advisor Pathways Inc. in Toronto. “Ensure you understand who they are and their goals.”
Knowing your clients is essential to managing their expectations, according to Hartman. “The depth of the relationship is determined by your understanding of the personal and emotional needs of clients,” he says. “Take the time to listen.”
2. Be proactive
It’s the advisor’s role to take the lead in building the relationship, Hartman says.
Ask relevant questions to find out as much as possible about clients and their families, Malik says. This can show that you care not only about your clients, but also about the people they love.
“Be curious,” Ferguson says. “Try to include the client’s spouse or partner in discussions.”
3. Communicate regularly
Contacting clients on a consistent basis is one of the most important ways of building loyalty, according to Hartman.
Find out how your clients want to be reached, Ferguson says – whether it’s by email, telephone, social media or paper-based methods.
“See them eye-to-eye at least once a year,” she adds.
Be sure, Malik says, to keep your clients abreast of changes and developments in your practice. Also, contact them about issues such as market conditions that may affect their investments at least every quarter.
4. Show your appreciation
Hold casual client-appreciation events, Ferguson says, that are “fun” and not about business. A follow up thank-you note or phone call can positively influence the way clients feel about your practice.
Also, consider sending clients and their family members birthday and holiday cards. Invite them to events they would enjoy, such as a baseball game or a concert.
5. Go the extra mile
Strive to offer excellent client service at all times. Be consistent in your frequency of contact and other activities.
“You risk losing clients by not having good client service,” says Malik. “If they are happy, they might even provide you with referrals.”