8. Advice wasn’t a good fit. They had a significant event in their life. This might involve a financial setback or windfall. It could be a health issue. This consumed them. You offered advice, but they felt you didn’t understand their situation sufficiently.
Proactive: Take time to let them explain their situation or predicament in their own words. Ask lots of questions. Explain you are giving your best recommendation, which opens the door to others in case they reclarify they weren’t completely clear in their explanation. Tell them why you feel your guidance is appropriate.
9. The firm raised fees. It happens. The company notifies clients by mail. The advisor didn’t get in front of this issue and establish a dialog with the client. Magazine articles were critical. The client feels the firm did wrong to an established relationship.
Proactive: The firm is also adding technology and additional value to the relationship. You add value. Remind them what you’ve done in the past and the value they are getting for their money.
10. The firm got really bad press. Someone, somewhere did something very wrong. The Feds hit them with a huge fine. It appears the corporate culture put making money for the firm ahead of acting in client’s best interests. The client is upset with the firm.
Proactive: This might work like a pendulum. There are times they are a client of the firm and times they are a client of the office. Both are true, but the emphasis changes. The problems likely took place in another division. Things continue to be fine in their corner of the world.
11. Someone else is cheaper. There is plenty of pricing pressure in this business. Firms advertise free trades. They see the value in the relationship entirely in terms of what they are paying out of pocket, meaning visible vs. invisible fees.
Proactive: It’s a value conversation. Financial planning and follow-up have a value. Review the process. The actual placing of an order is only a small part of the process. Another approach is to look at total costs, which includes the obvious ones and the hidden ones. You can help, without being confrontational.
Clients leave for many reasons. It is possible to get in front of them by being proactive. It’s one of the arguments for having a book of fewer, larger clients instead of many smaller clients.
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 is available on Amazon.