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Advisors tell me they have never lost a client and have a 100% retention rate. Apparently the day hasn’t come yet when they are in danger of losing a client to another advisor. But just in case it does, here are red flags that your client is sneaking and creeping around with another advisor.
Five signs your client is skulking around with another advisor
If a client starts showing two or more of these signs consistently, they are talking to another financial advisor.
- Unexpected request for documents, account information, passwords or a sudden increase in the amount of consecutive logins on your client portal
They haven’t logged onto eMoney in years and all of a sudden they’re calling you to reset their password. Then they log on five times in a week.
Any time that your client is accumulating documentation, you want to know about it. If they are talking to another advisor, they are already serious about leaving and you’ve got to come in with the Hail Mary.
But let’s say it’s innocent; maybe they’re reviewing their estate with their attorney. This is a great opportunity to deepen your relationships with their COIs.
I constantly hear from advisors that they have to scout for new CPA relationships so they can build their prospect base. To the maximum extent possible, you should build relationships with any service professional that your clients use. This may block the competition from infiltrating.
I do this with my own business. Any time I have to deal with a web developer, my task is to become BFFs with him or her to block their blogger friends from moving in on my territory.
- Bringing up random investment ideas and asking your opinion
Your client, out of the blue, calls you to ask if you can talk about reverse mortgages or life insurance settlements. You know what happened, right? Somebody from the Chamber of Commerce mixer last week swooped in with a sales pitch!
Client: “What’s this thing called a private REIT? Is that kinda like a mutual fund?”
You: “Interesting question, Rachel. What makes you ask about that?”
Client: “Oh. Ummmm, I saw it on the news.” (uncomfortable cough)
Yeah right.
- Change in communication
It used to be so easy to talk to her. Now you call your client and leave a voicemail, and she emails you back. Communication avoidance may be a sign that they are busy or stressed. But if it comes with other signs of cheating, this is a reflection of the fact that they are too busy gobbling up the Porterhouse steak at a dinner seminar about variable annuities.
(Or quinoa if they’re vegan.)
On the flip side, over-communication is also a sign of cheating. If your client used to rarely email, but is now calling you to question everything, there’s someone prompting them to do so. Be especially aware of a sudden request for detailed questions about fees, transfers, account minimums or withdrawals (with no life event predicating them). This is an obvious one when these queries occur in the absence of a concurrent life event.
Golden rule: Any types of inquiries about custody fees and you know something is up.
It is especially telling if they involve someone new in your meetings. If the client says the want their brother-in-law to sit in on next month’s call, get the person’s name. I am sure you will find him registered in the NAPFA directory.
- Uncomfortable body language
Body language on its own is not a predictor of deception. It is the changes in body language that signal a change in psychology.
Listen to your intuition. The last interaction you had with your client, did it seem that the vibe was off? Did their facial expressions show signs of stress? Read my article on body language to learn how to interpret non-verbal cues.
The most obvious signs are avoiding eye contact, covering their neck or mouth with their hands, creasing their forehead or touching their face.
- Asking about your professional credentials
When I was an advisor, I always used to know my clients were creeping around with another advisor when they asked about my CFA designation.
“Sara, you’re a CFA charterholder. Is that the same thing as a CFP?”
*sigh*
You know you’re being compared to someone else when your client asks you a question like, “I recently saw you are a RICP®. Is that the same thing as an AIF®?” Or they’ll maybe ask something like, “Is everybody at your firm a CFP or is it just you?”
Be on the lookout for these unprompted credential questions. Someone else has been pecking at you behind your back.
What to do when you catch your client creeping around
When a client is cheating on you with another advisor, rectify the relationship through open communication. Be prepared to lose the client. Once they go so far as to open up to someone else, there is a 50% chance they’ll leave you.
Don’t do what everyone does:
- Take them out to an expensive dinner. You are rewarding bad behavior.
- Let some management consultant sell you on some retreat on the beach for $4k and let’s all do yoga with scented candles burning while we think about “being our best selves” and getting rid of those self-limiting beliefs that caused this issue!
- Act like their personal butler in an attempt to win them back. They’ll just lose respect.
- Show emotion, as this will be seen as weakness.
- Tell them nobody can take care of them as well as you because you’re a fiduciary with 20 years of experience. Obviously they don’t feel that way if they are on the prowl.
Forget about meditating and groveling; it’s time for action. Go get on Facebook and find some bigger, more profitable clients and never look back!
Sara’s upshot
There’s nothing like a nice full pipeline to help you forget about that trifling Benedict Arnold. My podcast is focused on financial advisor lead generation. Please subscribe!
Sara Grillo, CFA, is a marketing consultant who helps investment management, financial planning, and RIA firms fight the tendency to scatter meaningless clichés on their prospects and bore them as a result. Prior to launching her own firm, she was a financial advisor.
Read more articles by Sara Grillo
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
