• They bring as much passion to all planning issues as they do to investing their clients’ assets. What sets financial life planners apart from money managers is the fact that they devote considerable energy to other issues their clients may have. Issues such as estate planning, income tax planning, cash-flow planning, risk management, business planning, educational funding, retirement planning, charitable giving, etc. They coordinate their advice with their clients’ other advisors, such as their CPAs, attorneys and insurance agents. They attend meetings with these advisors to ensure that all planning is well coordinated. They maintain copies of all relevant documents, including insurance policies, estate planning documents and current income tax returns. If they have investments that are not actively managed by their firms, such as self-directed retirement plans, they review and advise on those investments. They help clients who struggle with other decisions such as buying or leasing a car, refinancing a mortgage, keeping a mortgage versus liquidating investments to pay the loan, and analysis of a total care facility. In short, they become their clients’ primary advisor through whom all financial decisions are made. While they may not be directly compensated for these activities, they devote as much energy to them as they do to investment management (of course, this is assuming that fees are charged for assets under management; we prefer a retainer approach).

• They follow a financial planning process for all of their clients. Our firm does not accept investment-only clients. We are a financial life planning firm, and the process we follow is communicated to our prospective clients before any decision is made. While each individual planner will have his or her own style, the procedure is the same for all clients. It initially is a five-meeting process that begins with discovery and ends with recommendations and implementation. Of course, we have periodic meetings to discuss planning issues. We have discovered over the years that clients for whom we do planning are much more loyal to our firm and will not leave due to market volatility. This was not necessarily the case when we accepted investment-only clients. We are convinced that following a financial planning process is a major factor in client retention.

• Financial life planners with a high client retention rate make truly understanding their clients a major part of the process. We have, in previous articles, discussed the importance of discovery. To review, this entails learning about our clients’ histories, values, transitions and goals. It’s aligning recommendations with core values. It’s understanding the role philanthropy may play in their lives. It means discovering what they want their legacy to be. It may challenge the notion of retiring just because they have enough money to do so. These planners want to know what the genesis may be for some of the poor decisions their clients may have made and continue to make. This kind of discovery accomplishes two things: First and foremost, it helps to align our clients’ goals with our recommendations in a way that would not be possible without this discovery. Secondly, it establishes a rapport and relationship that clients would be reluctant to give up and, therefore, improves client retention.

• These final tactics I will label “administration.” Some of these may not even need to be mentioned, but based on some of the feedback we get from potential clients, they are factors in retaining clients. Return all phone calls promptly. We are astounded by the number of prospects who tell us they could never get their advisors to return their calls. We have a policy that all calls received before 3 p.m. are returned that day and others are called back by the following morning. Spend as much time training your receptionist as you do your planners.

The person who greets your clients and answers the phone is the face and voice of your firm and cannot be taken too lightly. Our clients love Pearl, and she treats them as if they are the most important people in the world. The reality is they are the most important people to our firm. Empower your employees to make decisions that are in the best interest of the client. This not only improves morale but creates an environment where everyone in our firm understands our number one core value: “The clients’ interests always come first.” Reward your staff on the accomplishments of the firm. Our incentive pool, which is based on the performance of the firm as a whole, is distributed based on each person’s position in the company. This includes our senior planners, and we do not “eat our own kill.” In fact, our new business report does not cite the planners who brought the business to the firm. In this way, we are assured that new clients are serviced by the most appropriate planner based on the circumstances of those clients.

This is certainly not meant to be an all-inclusive list, but it is based on the experiences of our firms and others. It takes too much effort to obtain and service new clients to leave their retention to chance. Following some of the procedures above may lead to retaining 98% or more of your clients. 

Roy Diliberto is the chairman and founder of RTD Financial Advisors Inc. in Philadelphia.

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