Some clients complain that they only hear from advisors when things are going well, says David Schucavage, president of Carolina Estate Planners, Wilmington, N.C. “When markets are dropping and people are losing money, it is even more important to maintain contact and give updates.”
Advisors sometimes fail to maintain regular contact with established clients, which makes the clients ”feel neglected and they will leave you,” he warns.
Failing to understand a client’s goals and objectives can be just as devastating to a relationship, according to the survey.
“People leave their advisors for the same reason they leave any relationship, [because] the advisors do not provide what is expected,” says Melody Juge, founder and managing director of Life Income Management. “I always ask people what it is they expect from me. What is their definition of service?”
Advisors should never assume they know what the client is thinking, says Jim Heafner, president of Heafner Financial Solutions Inc. Too many advisors listen to a client with an agenda of their own in their heads.
“It is important to listen in order to understand the clients’ situations and their desired outcomes,” Heafner says. That way, the advisor can withstand the competitive pressure. “Referrals come from a well-served client in a long-term relationship.”
Melissa Mrazek is with the practice management group of Curian Capital LLC and works with advisors to improve their practices. Much of that work revolves around teaching advisors how to demonstrate to clients the value they bring to investing.
In many cases, the advisors are not connecting well with clients. Clients want advisors who listen, who have high ethical standards and who put the client ahead of the advisors’ profits. Advisors think they are delivering these things, but the client does not see it, according to Mrazek.
“In the last few years, advisors have been getting more clients who have come from another advisor,” she says. At the same time, “there has been a shift in the mindset of advisors from selling products to building a quality relationship. It all comes down to communication.”