Remember when your parents knew you did something wrong? You were positive you played it cool. Didn’t leave any clues. How did they do it? They kept themselves on the lookout for changes in behavior. Financial advisors should do the same.

One of the greatest fears of advisors is losing an account. Unlike the business world, clients don’t conduct performance reviews or put you on probation. They just leave. There is some good news. They leave clues. There are changes in behavior. It’s those things your parents were experts at spotting.

1. A friend of a client brings you news. You are routinely chatting with a friend. They bring up a conversation from a recent dinner party. One of the other guests was complaining about the high fees they pay on their investment account. After a few more questions, you realize the complainer in question is one of your clients!
Problem: The client doesn’t understand the value they are receiving, offsetting the cost of the relationship.
Approach: You should have a list of the services you provide or have available, if asked. You advise on assets within the account and assets elsewhere, like their 401(k) at work. Have a face-to-face conversation about how they have done over time and the costs.

2. A third party is added to the decision making process. It’s an issue, sometimes with older clients. A nephew is referenced or introduced. Moving forward, they need to approve your suggestions before the client will consider them.
Problem: Your client might have lost confidence or the third party has questioned your judgment, promising to look after their best interests.
Approach: This can be fatal to the relationship. Ideally a meeting of the parties can take place. This should include a review of how your client has fared while following your advice. There should be a tactful way of bringing up that giving advice comes with responsibility. Your client can fire you if they aren’t happy with the results or the relationship. By entering into the decision-making process, which might be time sensitive in some cases, the new arrival is accepting part of the responsibility if they reject an idea that later is found would have benefitted the client. This must be done tactfully. Few people want to accept responsibility.

3. Clients go dark. Your client was always reachable. If you didn’t get them immediately, they called back. Suddenly messages don’t get returned. It’s like pushing on a string.
Problem: They might have a competitor prospecting them, casting doubt on their current advisory relationship. “They did what to you?” Maybe, “You are paying how much?” Since most people avoid confrontation, they are establishing distance.
Approach: It’s not “Are you seeing someone else?” The first (noble) thing to do is confirm they are in good health. If one of them was injured in an accident, all energy would be focused on that issue. Try different channels of communication. You want to tactfully ask if something is on their mind. Assuming you can reach them, lean on the longevity of the relationship.

4. Spending lots more. Many of your clients might do their banking through your firm. You see their checking activity if they have a cash management account. In this case, the relationship is fine, but large sums of money are leaving the account by check or debit card withdrawals.
Problem: Your client might be victimized. They might be funding a ne’er-do-well relative. They might be investing in a “sure thing.” They might be making lots of charitable contributions.
Approach: Hopefully you are getting good at being tactful. This can be a scheduled financial planning discussion. Have their needs changed? They might be excessively generous, but they need to consider their own financial health first. “Charity begins at home.” When asked politely, they should open up. Be patient. Smile. Together, you can budget a certain amount for money to be given away. Now the pool is smaller.

 

5. Your client complains a lot. These aren’t big complaints. “My statement is late again.” Maybe they ask: “Why do we own these stock? Let’s sell them and add the money to the ones that are doing well.” Maybe it’s timing. “I called this morning. You weren’t in. Why does it take so long for you to get back to me?
Problem: There may be problems in their life they don’t have control over. They may feel powerless. They want some aspect of their life where they can be in control.  hey may not feel like an important client.
Approach: Since you do financial planning, it’s normal to have periodic review meetings. Ask what’s going on in their life. If they are retired, hopefully their portfolio is providing an adequate income. This takes a worry off their shoulders. Get them thinking about the big picture. Remind them of the length of your relationship. They are an important client. Draw them out about what’s bothering them. They might be upset about domestic or international events, but things often fall back into perspective when they say them aloud. Remind them about things they can control and things they can’t.  Thanks to you, They have a good degree of control over their finances. 

The way clients behave towards you is often due to the impact of outside influences. They need to know you are on their side.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor can be found on Amazon.