Losing a high net-worth client doesn’t just affect your book of business, according to Grant Shorten, director, strategic insights, Renaissance Investments, it can also affect you personally.
“Everyone knows it’s more costly to acquire a new client than it is to keep an existing one,” said Shorten, who spoke at a Toronto event hosted by Renaissance Investments, a division of CIBC Asset Management on Monday, “[but] losing clients also has an emotional cost.” For example, when an advisor takes the loss of a client personally the situation could have negative affects on his or her self-esteem or self-confidence.
As such, advisors want to avoid deal breaker situations that generally trigger a client’s departure. These situations include poor service, meaning the advisor is never available, making repeated mistakes in the same area and an advisor displaying a lack of conviction around his or her own values, beliefs and investment recommendations.
Advisors can avoid these deal breakers and keep more of their clients by offering a higher level of service with these four steps:
> Make yourself available
To keep affluent clients happy either yourself or a team member should always be available – within reason – when they are trying to contact you.
“It’s not rocket science,” said Shorten, “but it’s incredibly powerful if [advisors] just do it.”
> Create a transparent business
Fee transparency is now a reality for advisors with the implementation of the client relationship model, said Shorten, but offering a higher level of service means making your entire business transparent.
“It’s a see-through practice,” said Shorten. “It means being transparent about our service to our client, it’s about being transparent about our expectations of our clients and how often they should contact us with material changes in their universe.”
> Show interest in your clients
Get no know your clients beyond their investment goals.
“Be interested in [your] clients’ lives,” said Shorten. “[This is] incredibly important with the affluent.”
Ask clients about activities they are involved in, such as horseback riding, or talk to them about a favourite pet.
> Manage expectations
Advisors should be realistic about portfolio expectations right from the start of the client relationship, according to Shorten, and avoid constantly comparing returns to a benchmark.