You are about to lose a client when …

Know the signs and how to prevent the departure

Jul 16, 2014 @ 12:48 pm

By Liz Skinner

Clients who are unhappy with their financial adviser and are considering a move rarely spell out their discontent. But noticing some early warning signs — like clients who stop their regular calls or aren't following investment recommendations — can tip off an observant adviser who can potentially save the relationship.

“Clients aren't going to be waving a flag saying they are unhappy,” said George Tamer, director of strategic relationships at TD Ameritrade Institutional. “It's all about being an active listener in a conversation.”

(More: 6 signs your client is about to ditch you)

For instance, clients may casually mention a problem they have had with service or fees, and advisers need to immediately act on this “clue,” Mr. Tamer said.

A complaint may sound innocuous, but advisers need to dig deeper and ask the client more questions.

“Often a client may say they are disappointed, but what they mean is they are deeply upset,” he said.

By proactively reaching out to these clients who may be considering or even have decided on a switch, advisers can sometimes keep hold of those clients and their assets.

If there has been a problem or mistake made, advisers need to jump into “service recovery mode,” by apologizing, fixing the concern and providing a gesture of appreciation, such as a gift basket, a bottle of wine or a donation to a favorite charity, Mr. Tamer said.

Financial adviser Glenn Duphiney also believes in proactively addressing any type of miscommunication or error.

“Clients will remember a particular incident and the way it went, and if they didn't get a good resolution, that will stick with them and that can sabotage a relationship,” he said.

About a year ago, a client of Mr. Duphiney's called him upset that an investment had not been sold using dollar-cost averaging. Even though no one recalls the client saying this is the method he wanted, Mr. Duphiney said the firm worked with his compliance department to figure out how to make up the difference between what the client received and what he would have received using dollar-cost averaging.

“It reset the relationship and the client is closer to us now than before the error,” Mr. Duphiney said.

In fact, the client referred two other clients a few months later.

The ultimate sign that a client plans to leave is when the adviser receives an ACATS (automated customer account transfer service) notice. Mr. Duphiney said advisers should immediately call the client and start off by letting them know they will take care of processing the request expeditiously. Then, if the client is open to further conversation, ask about the reasons for leaving and offer changes if appropriate. A number of times Mr. Duphiney has been able to retain clients even at this late stage.

For those who do walk out, he makes it clear that the door is “always open” for them to come back, and in about a dozen cases they have, he said.


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