Unhappy clients vote with their feet. They do not sulk or give you the silent treatment at home like an unhappy partner. They do not put you on probation, like the manager who is unhappy with your performance or sales numbers. They simply vanish. If you look at your LinkedIn total count of first level connections and see the number dropped by two overnight, you know what I mean. What do we tell ourselves to rationalize their departure?
1. Myth: They were not a good client, anyway. Some clients do not leave with a big bang. They gradually take money out. Bonds mature and they do not roll it over, they withdraw it. The account revenue declines dramatically. Be on the lookout for this change in behavior. Get in front of them as soon as you can.
2. Myth: They do not understand what I do for them. Years ago, the business was transactional. People with stock portfolios heard from their advisors often. Then managed money entered the picture. The advisor was not suggesting trades, managers did that in the background. Clients got annoyed with multiple trade confirms arriving in the mail. Now they can be suppressed. Some clients rarely hear from their advisors because it seems everything is on automatic pilot. Review client holdings periodically. Ideally the client is involved. At least call and let them know you looked over everything and no action is necessary right now.
3. Myth: They think they are smarter than me. Sometimes it can appear to be easy to make money in the stock market. It has been said a rising tide lifts all boats. Some clients feel they don’t need you and can cut out the middleman. If they are using managed money, decision making has been delegated to experts. Transition into the role of relationship manager. Discuss the return they have received in the context of the degree of risk they took to achieve that result.
4. Myth: They don’t want to pay for my services. This can often be an issue when the firm raises prices. This becomes a bigger problem if you don’t tell them beforehand. It can get worse if you blame it on “the firm.” You are an agent, a representative of your firm. Big firms are often investing in the client experience. Often this is delivered through technology. What can your client do they have not done before? Are you the only firm with this new functionality? They are paying more, but what benefits are they seeing?
5. Myth: They know I am thinking about them. This can be an excuse for not picking up the phone. If you have heard this in personal or family relationships, you are often skeptical. You see this as an excuse. Birthday cards and anniversary cards still make a big impact. Can you do performance reviews at least quarterly? When you call, do you remind them the last time you spoke?
6. Myth: If they had an issue, they would call and tell me. This can be viewed two ways: If they had a problem with the relationship or if they had a question about their accounts. It is logical someone with an issue would bring it to your attention, but what if a competitor injected doubt, that you are not acting in the client’s best interests? They could be trying to create an adversarial relationship. You not only need to reach out to clients on a regular basis, you need to be listening for signals they have something on their mind. You need to draw them out.
7. Myth: They are leaving because someone unscrupulous promised them the world. This does happen. People think the grass is greener elsewhere. They have not told you and the account suddenly transfers out. You have great difficulty getting them on the phone afterwards,. A New York advisor would call a month or so after the move. They would start by saying they know the client had their reasons for leaving. You wanted to be sure things worked out as they hoped. You were a very important client. Meeting them halfway can give the departed client the opportunity to rethink their decision and possibly come back.
8. Myth: They have unrealistic expectations. You feel the client expects you to see the future and anticipate downturns. You should be able to find those high coupon CDs after interest rates start declining. The client might not think these expectations are unrealistic. You need to give them perspective. Keeping in touch helps a lot. So does focusing attention on the long term. What do your analysts think about the direction of the economy? What are the macro investing trends? Is your client positioned to take advantage? Then weakness in the market should be seen as a buying opportunity.
9. Myth: They should understand I am not on call 24/7. It is unlikely people will call you late at night at home. Sometimes it happens. You need to cut your clients some slack during times of extreme volatility. Set scheduled review dates in advance. Your doctor does it! Let clients know you can go into detail now if necessary, but we have a review date scheduled in a few days. You need to call clients back within a reasonable period of time.
10. Myth: They will come back. With many types of relationships, we hope the other party will come to their senses and return in a contrite manner. Parents feel this way about their children. Someone might feel this was about their ex. Advisors think clients will wake up and say, “What have I done?” This rarely happens. It makes sense to part on good terms and stay on good terms. Strong ethics can be a good selling point, especially if they start to get uncomfortable in the new relationship.
It is important to see things from the client’s point of view. Maintaining the lines of communication and staying on good terms usually pays off in the long run.