Going out and hunting down new clients is pretty important for a Financial Advisor, right? We’re not arguing about that: new acquisitions are vital for driving your business forward. But it’s all for nothing if you’re not managing to keep hold of the clients you’ve already got. In this article, we’re going to be explaining why client retention matters more than new acquisitions for career growth and long-term success.
The Power Of Client Trust
Trust is everything for a client who is handing over their hard-earned cash to a professional and so building this should be at the heart of everything you do. Trust is what makes people stay by your side year after year but that can be quickly depleted if you’re always too busy chasing newbies.
The Financial Benefits Of Retention
As a Financial Advisor, your business is about making money and that means constantly adding to your customer base, right? Wrong. When you don’t take care of your existing squad properly, they’ll move on. This means that you’re in an endless cycle of throwing money at your marketing efforts just to attract new leads. Have a think about the life cycle of a client - chances are that this involves a number of financial matters including marriage, buying a home, investments and retirement. If you focus on retention, you stand to gain a chunk of cash each time the customer reaches a new milestone. For you, this means better career security and more financial gain.
Building long-term career stability
If you’re thinking that career stability means stashing as many clients into your portfolio as possible, it’s time to think again. As well as the fact that this leads to a high amount of turnover, it can also be pretty bad for your reputation. These days, folk tend to do a lot of research before hiring an advisor and when they see that other clients don’t stick around long, they’ll be straight off - probably to your competition. When you build a small but perfectly formed client base, you can help to make your career bullet-proof - including succession planning. You’ll also be better placed to cope with recessions and downturns as those loyal customers of yours won’t think of going anywhere else.
The untapped power of referrals
Quick question - how many client referrals have you had this month? Thought so. We’ll let you into a secret; people talk. When looking for financial services, a great many people turn first to family and friends for recommendations. For you, this means that every loyal client will potentially send more folk your way because that trust that we’ve talked about is already there. Aside from anything else, warm introductions are so much less effort than cold ones which makes for a slightly easier life.
Creating a great client experience
So how do you keep hold of your clients without physically restraining them (which, by the way, we don’t recommend)? That’s an easy one - it’s all about the client experience. We’re not talking about showing them a good time or plying them with gifts. A good client experience is one where a customer can always get you on the phone and feel sthat you have their best interests at heart. The key here is to grab yourself a tool such as a
CRM for financial advisors which can take the strain by keeping tabs on that all-important data and help you to monitor and schedule meetings and follow-ups. When clients feel that they’re receiving personal attention, they’re usually not going anywhere anytime soon.
Your professional reputation
As we touched on earlier in this article, when potential leads see that your office seems to have a revolving door, they’ll usually give you a wide berth. If, however, their research tells them that people come to you, snuggle in and stay for the duration, they’re likely to see you as more trustworthy. All of this means that you gain a reputation for reliability and credibility - both of which are very good things for somebody in the responsible position of Financial Advisor.
The emotional rewards
Here’s the thing that nobody tells you about long-term clients. As well as being lucrative, retention means that you get to be part of these people’s lives - that trusted soul who is right by their side for every new home, graduation, wedding and retirement - and career satisfaction rarely gets better than that!
Finding The Right Balance
Now that we’ve got all of that off our chest, we’re not of course saying that you should forget about giving the come-on to new clients. Managing your portfolio is a balancing act and the magic happens when you
find the right ratio of new and existing clients. When you do this, you keep everybody happy - including yourself.
Conclusion
So, let’s sum up what we’ve learned about client retention. Focusing on this rather than chasing after new customers is good for everybody concerned. For your customers, it means security and peace of mind and, for you, it means a long and successful career. As we’ve said, we’re not saying you shouldn’t look for new people to add to your portfolio; it’s more about recognising the value of the ones you have and prioritizing these over simply bigging up your numbers.
