Financial Advisor Marketing & Technology

Marketing & Technology For Independent Financial Advisors

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Reducing The Rate Of Client Failure


Why do some advisors annually get fired by 10% of their clients or more while other advisors consistently lose just 2% or 3%?

With the impact of the financial crisis hitting advisory firms and clients alike, the answer to this question is critical and may not be that complex.

Clients fire you because they feel disconnected from you and your firm. They leave when you lose credibility, when you fail to touch them in meaningful ways, when you fail to confront their crucial financial issues with them.

Clients don’t fire you because of investment performance. They fire you because they feel you let them down and do not provide enough value.

When a client fires you, it’s not just you who loses. They, too, often lose. Clients that fire you may hire an advisor who is not as devoted or competent. Or they may try to manage their money on their own, which may lead to failure. When a client fires you, it’s often not just you who has failed. They also fail.

What can you do about it? How can you stem your attrition rate and help more people by giving them good financial advice?

The answer doesn’t lie in a new financial product; we have enough products. The answer is not in a new market-timing strategy; we all know diversification is the wise course because no one can predict the future.

The answer is in your communication with clients. It’s in your ability to draw people out, to make it safe for them to share with you their greatest fears, and your desire to actively listen and then meet their demons head-on with reason and intelligent solutions. The way to retain clients is to be deeply engaged in ongoing financial conversation with them about their greatest fears and dreams.

So I asked one of the world’s foremost experts on crucial conversations for help—the authors of The New York Times bestseller, Crucial Conversations: Tools For Talking When The Stakes Are High. To my amazement, the authors were intrigued and have designed a way for financial advisors to better understand how to conduct crucial financial conversations with clients.

Published in 2002, Crucial Conversations, has influenced millions of business leaders. “This is a breakthrough book,” said Stephen R. Covey, author, The 7 Habits of Highly Effective People. “I found myself being deeply influenced, motivated, and even inspired.”

The authors of Crucial Conversations, Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler, established a consulting firm, VitalSmarts, which has developed dozens of corporate training programs for dozens of Fortune 500 companies.

David Maxfield, a respected academic, was named head of research at VitalSmarts. Maxfield has taught at Stanford University and the Marriott School of Management at Brigham Young University. He is the recipient of Motorola University’s Distinguished Teaching Award and Stanford University’s Dean’s Award for Innovative Industrial Education. Maxfield is also the author of the 2007, Influencer: The Power To Change Anything.

Maxfield has been working with me to research how well financial advisors handle crucial conversations with clients. On July 10, at what promises to be a special session, Maxfield will lead a presentation at The Financial Crisis Webinar Series in which he will teach advisors the basic skills needed to conduct crucial conversations with clients. You can reserve a place at this free webinar now by taking a 10-minute survey designed to measure financial advisors’ ability to conduct crucial conversations with clients.

The full impact of the financial crisis has not yet been felt by advisors. Investors have been paralyzed by fear. Many advisors are likely to be fired in coming months as the shock of the crisis subsides. Please take the survey and join us as we all heal the wounds of the meltdown and try to learn from it.


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