Bringing in a steady flow of new clients and maintaining existing clients is paramount for any successful advisory practice. However, on occasion a client will leave, opting for another advisor or deciding to do their planning themselves. In my six years as an independent RIA, I have lost four clients. I tend to take client departures personally even though I realize that's not the proper perspective. What I have learned in the process is the topic of this post and I hope it will help some of you process this type of event when it occurs. Let's begin with why clients leave.
Clients choose to leave their advisor for a multitude of reasons. Often the advisor fails to meet the client's expectations. Many times, if the advisor only knew what the client was expecting, they could have saved the relationship. However, sometimes the client is seeking something the advisor cannot deliver, in which case the exit is unavoidable. Client expectations are something that should be discussed in detail in the very beginning before you decide to accept the client.
Personality also plays a major role. For example, I asked a client recently why they chose me over another advisor. They said they liked my personality better. Because that's such a vague answer I dug deeper. It turns out that when they met with the other advisor for lunch the advisor's phone rang several times during lunch and he decided to answer it. I don't know about you, but I believe this conveys the message that the client is not as important as the phone call. Hence, I would suggest never answering a phone call when you're with a prospective client, unless it's an emergency. I believe one of the most common errors an advisor makes is not spending adequate time to ask the right questions in the initial interview.
Here are a few do's and don'ts which may help. I realize there are many more and that this only scratches the surface. But it is a start.
