Are Your Clients Twisting? Here's Why They Say Goodbye

Are Your Clients Twisting? Here's Why They Say Goodbye

Clients leave us, and most times we blame someone else…we call it “twisting” or “churning”. The immediate inference is the client only left because somebody else – who is less ethical – took perfectly good business and moved it for no reason other than their own gain.  Twisting becomes the acceptable explanation as to why a client left a wonderful adviser (good person!) and great products or plans to head somewhere else (bad person!).

This is probably the most contentious issue in the financial services industry: clients moving advisers, or moving to different product suppliers.

Advisers and suppliers alike disparagingly refer to any such shifts where another adviser is being the result of “twisters” and “churners”, but interestingly, one rarely hears the industry talking about the customer motivation for moving firms or products though.

It is simplistic to assume that customers move only because they obtained a slightly cheaper price elsewhere.  It may be true that trimming a minor percentage in costs is a motivator for some, though it would not be true to suggest that this is the primary reason that customers move in the main.  If we accept that financial advice and financial products are considered complex, time-consuming, and a downright drag for most consumers, then it follows that they are not likely to go through all the hassle of switching everything to save just a few dollars a month.

It is just as untrue and simplistic to assume that “the other adviser” who helps a client shift is doing something wrong.  Oftentimes in my experience they are actually doing a much better job for the client than the incumbent adviser who has barely been in touch and hasn’t engaged in a full review of detailed advice for many years.

So rather than vent about “twisters and churners” the question that any customer-centric professional services firm should be concentrating upon is:

“What makes our clients say goodbye?”

If I am permitted to be a little cynical for a moment, it is worth noting that replacement business is only called churning or twisting when it is going away from you. That is, when you are losing a client it is appropriate to label the competitor as unethical; yet; when it is coming to you, and your firm is picking up the client from your competitor, that is not twisting it seems.  A hypocrisy which is conveniently ignored most of the time within the industry.

Inevitably when there is little organic growth in the industry then competition for existing industry customers lifts in intensity, and there are advisers and firms alike who deliberately set out to take existing customers away from other industry participants as a means of growing their own business.  I would wager that this tactic exists in most business sectors most of the time, so it hardly seems aberrant behavior.  That is; it is a normal activity of virtually every commercial sector.  Of course, it DOESN’T seem to exist as an acceptable business tactic in the “Professions”.

Of course as we all know, one of the defining hallmarks of a profession is this simple concept of “putting the customers interests first“.  So let’s do that.  Let’s look at a superb piece of data that tells us what actually motivates customers to decide that despite the complexity and hassle factors, they are going to move firms and products.

Despite the fact that this research is focused upon financial planning clients (and it was from a few years ago), there are lessons for all financial advisers here.  The primary lesson is price is not suggested as a key reason for leaving an advisory firm.

Let’s be brutally clear here; the 2 standout reasons why clients move is because they lose trust in the advisory firm and they wanted more personal advice.

Clearly there is a backlash effect at work as well, in that when product performance suffers then clients become dissatisfied, and that is just as true for lending or risk clients as it is for financial planning or investment clients.  Well, that is fair enough actually and we have to cop that one on the chin as that would be the same in any industry: if a recommended product or service does not perform satisfactorily then clients will become dissatisfied and leave.  As consumers ourselves that is what we would do, so we shouldn’t ignore the fact that our clients will too.

For all that though, there is little doubt that maintaining trust and delivering personalised advice are the two key battleground issues for retaining clients.  To do this successfully means lifting the communication levels and maintaining a constant presence in the clients mind.  These are two things that the advice sector has been fairly casual about for a very long time, and consumers are now letting you know that these things matter because if you don’t deliver on them they will walk.

This is where financial advisers have to win their own war for client support.  Because that other adviser…the twister?  Usually they are simply a catalyst.  The client is already fundamentally dissatisfied to some degree but didn’t necessarily see an alternative course of action until someone else spoke to them of different possibilities and offered to help.  So the other adviser is not really the problem: if we had done our work well the adviser wouldn’t get a look in.

Client twisting?  If it happens regularly or there is a reasonably high proportion of your clients being twisted then one has to accept that actually we probably deserved to lose them, because in a sense we already had lost their support and confidence anyway.  We had lost them before they actually said goodbye to us….so maybe it isn’t the twisters fault at all.  Maybe it is our own.

Tony Vidler
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Tony Vidler is the expert in professional services on creating strong personal branding and target marketing positioning. Tony has been in financial services since 1990, ... Click for full bio

Most Read IRIS Articles of the Week: Feb 19-23

Most Read IRIS Articles of the Week: Feb 19-23

Here’s a look at the Top 11 Most Viewed Articles of the Week on, Feb 19-23, 2018

Click the headline to read the full article.  Enjoy!

1. Don’t Get Pinged by the Social Security Earnings Limit

I’d like to introduce you to Peggy. Born in 1956, Peggy will be 62 in 2018. She has worked in retail her whole life, the past twenty-five years spent in management. Peggy divorced from her husband 14 years ago, is still single and has no children. — Dana Anspach

2. We're Back to “Bad News is Good News” and “Good News is Great News”

This week the markets shrugged off last week’s fears and went back to the slow and steady melt up, despite economic news that looked likely to once again rock the boat. — Lenore Elle Hawkins

3. Q1 2018 Factor Views

Themes established in 2017 across a wide range of markets and factors continued to resonate through the fourth quarter. Economic growth was strong and supportive of equity markets across the globe, a range of volatility measures reached all-time lows, and business and consumer sentiment remained elevated. — Yazann Romahi and Garrett Norman

4. A Beneficial Basket of Commodities

Advisors and investors that feel they are hearing more and more about commodities and the corresponding exchange traded products in recent months are right. That is a natural result of dollar weakness and yes, the greenback is floundering again in 2018. — Tom Lydon

5. 3 Trends Shaping the Future of Asset Management

As the industry works to cope with new regulation, wades through an outpouring of new products, learns to satisfy investors’ shifting priorities and manages the active-passive debate, the viability of business units will be questioned, and at times radical measures will be taken. Peter Hopkins

6. 5 Ways Advisors Leave Money on the Table, and What to Do About It

My hope is that this article points out some opportunities for you to make more money and serve your clients at a higher level and that you decide to do something about it. — Bill Bachrach

7. The Market Has Gone Wild! Is It Time to Change Your Investment Strategy?

Whether the market is flying high or taunting your emotions with new lows and some bumpy volatility, here are four things every investor should keep in mind ... — Lauren Klein

8. How to Deepen Client Relations and Capture New Business Using Engaging Content

Why financial advisors NEED to understand much more clearly the power of good digital market. With tools like AdvisorStream, it’s easier than ever to get the content you need to drive leads and referrals today! — Kirk Lowe and Matt Halloran

9. Three Ways The Most Successful Gain Big Attention

How do some firms and ideas go from nowhere to everywhere in a few short months? All of a sudden a restaurant becomes popular, a gas station gains a cult following, or a Broadway show becomes too popular to get a ticket for years. — Maribeth Kuzmeski

10. Who Are the Hottest FinTech Firms and Influencers Around the World?

"Worldwide, $27.4 billion poured into fintech startups in 2017, Accenture reports, up 18% from 2016. With so much in play, it’s not surprising that 22 companies are new on this, the third edition of our list."  — Chris Skinner

11. The New Stock Market Normal Is Not What You Think!

Many sensational headlines have been written the past few weeks about market declines, but two things have increased for sure: the viewership and the ad revenues of financial media organizations — Preston McSwain​​​​​​​

Douglas Heikkinen
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IRIS Co-Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues ... Click for full bio