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Unless you take action, even the best advisors are going to lose more clients than you’d like. Fortunately, you can ask your clients a simple question that will counteract the dynamics causing those defections.
The reason for the spike in defections is simple. Markets have tested everyone’s patience – advisors and investors alike. When I talk to investors, I seldom run into anger – the more common sentiments are uncertainty, anxiety, discouragement and disappointment.
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Even though clients aren’t mad at their advisors, many doubt whether they have the right investment strategy and consequently the right advisor. As a result, it can take just one conversation with a brother-in-law, father-in-law, son-in law or golf buddy (notice that all the troublemakers here are men) to persuade a client to sit down with another advisor to look at their alternatives.
Most advisors recognize that in challenging times you have to ramp up client communication – the difficulty is that heightened levels of communication take you only so far. That’s why I recommend that you add a simple question to your client conversations.
It’s a question that will make the difference between keeping clients and losing them.
Will you promise to call me if you’re nervous?
Early last year, I wrote about a Chicago restaurant that made a simple change and reduced no-shows from 30% to 10%, increasing their bottom line by $600,000 in the process.
That change? Rather than making the statement, “Please call us if you have a change in plans,” they changed it into the question, “Will you call us if there’s a change in plan?.”
Getting that commitment had a huge impact on customer behavior. In my article, I suggested that advisors use the same approach of getting a commitment when talking to prospective clients. Rather than saying, “Is it okay if I call you in two weeks?” which is really a statement masked as a question, I suggested that advisors say, “If I send you the article, will you have time to talk next Thursday?” and then wait for a response.
So based on that principle, say something along the same lines to clients (of course putting this into your own words):
“Given everything going on, many people are nervous – that’s understandable. I’d like you to promise me one thing. If you ever find yourself becoming anxious about your investments, even a bit, I want you to pick up the phone and call me, so we can talk about your concerns. Would you promise me that you’ll make that call?”
Now even if clients say yes, there’s no guarantee that they’ll make the call or that you can salvage the relationship.
But by saying this you’re accomplishing two important things.
First, you are driving home to clients the priority you put on their peace-of-mind and wellbeing. And second, you increase the chances that you’ll have an opportunity to talk to clients about their concerns before they reach the point of no return.
For a 30-second investment, you will send a powerful statement – and potentially salvage a client who would otherwise be at risk.
conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written and video commentaries, go to www.clientinsights.ca. Use A555A for the rep and dealer code to register for website access.