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From the Horse’s Mouth:

How to Retain AUM, According to 780+ Clients

From the Horse’s Mouth:
How to Retain AUM, According to 780+ Clients

  19th April 2024 by Gareth

   19th April 2024 by Gareth

YCharts published the findings of an eye-opening survey of nearly 800 financial advisor clients, shedding light on a concerning trend: 75% of respondents either switched advisors or seriously contemplated doing so in 2023. This survey also offers valuable insights into what clients truly want from their financial advisors, and the various factors influencing satisfaction and retention rates. Here are the key takeaways:

Communicate regularly with a multichannel approach

Communicate regularly with a multichannel approach

The survey underscores the importance of frequent and varied communication. Clients who receive infrequent communication from their advisors exhibit lower confidence levels in their financial plans, especially concerning fears of recession. Around 79% of clients prefer to be contacted every three months to discuss their financial progress, a significant increase from previous years. Notably, clients in the 45-60 age group and those with substantial assets prefer even more frequent check-ins. 

There is no quicker way to lose clients than having an impersonal transactional approach to the relationship. Advisors should not only communicate and reassure clients regularly, but also incorporate varied methods such as social media updates, newsletters, blogs, and personalized calls to meet diverse client preferences effectively.

Understand client preferences and take them seriously

Understand client preferences and take them seriously

Most clients have a distinct inclination towards either exclusively in-person or virtual meetings, with only 1 in 5 indicating a willingness to mix both. Among clients aged 30-44, 41% favor virtual meetings exclusively, while 49% of those aged 45-60 prefer in-person meetings exclusively. Surprisingly, just 5% of respondents are satisfied with their current meeting arrangements with their advisor. This means clients are very particular about such preferences and should be taken seriously by advisors. So much so, that they can make or break the relationship in the long run.

Provide solutions tailored to clients

Provide solutions tailored to clients

While most advisors claim to understand the need to create customized solutions, clients still feel they are not being heard. The survey revealed "Deep Understanding of Me and My Goals" (56%) and "Portfolio Performance" (55%) as the top two factors influencing client satisfaction. This is not a bad thing, despite it requiring marginally more effort from the advisor. Clients with clear visions, values, and goals are more likely to adhere to their financial plans, leading to better outcomes for both the client and the advisor. By demonstrating a deep understanding of a client's individual needs, the advisor’s guidance is also much more readily accepted. 

Be direct and clear in your communication

Be direct and clear in your communication

Financial services professionals tend to use a lot of jargon when explaining investment strategies. While this can be useful when communicating with peers, it’s problematic when making recommendations to clients. The survey found that just 64% of respondents felt their advisors' discussions resonated with them, a decrease from 70% in the previous survey. Those seldom contacted understood only 54% of their advisor's typical meeting content, compared to a 71% among frequently contacted clients. Advisors may not think of themselves as copywriters or educators – nevertheless, communication is one of the most important parts of an advisor’s job. This is why financial professionals must make a concerted effort to become clearer communicators to ‘laymen’ and become more persuasive in how they make recommendations to clients.

Communicate more frequently and strategically with high-value clients

Communicate more frequently and strategically with high-value clients

50+% of respondents with assets over $500,000 expressed a desire for more frequent communication from their advisor. Additionally, a staggering 85% of these high-value clients believed that increased personalized communication would enhance confidence in their advisor's services. Furthermore, 88% of these clients indicated that a personalized communication approach would sway their decision to retain their advisor’s services. A practice of sending personalized notes to every client can be tedious to maintain. The answer may be to prioritize doing so only for select clients. This means frequently sending personalized communication to show how much you value your relationship with these high-value clients, and less so for other clients.

In essence, the survey emphasizes the importance of regular communication and personalized approach to serving clients. By understanding and adapting to client preferences and prioritizing communication, advisors can not only keep more clients happy — but also have a greater percentage of client assets entrusted to them and enjoy a greater number of referrals.

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