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Alright, so you landed your first or yet another high-net-worth client or maybe even one (or more) in the coveted ultra-high-net-worth camp. Either way, it’s an accomplishment.
On the other hand, advisors shouldn’t be quick to pat themselves on the back because converting a client from prospect is only half the battle. Keeping clients as, well, clients is important as well. That’s why customer attraction and retention are often discussed at the same time.
Advisors know that clients have different motivations for becoming clients, for sticking with an advisor and for departing for what they perceive as greener pastures. That’s true across asset and income spectrums, but those in the high-net-worth spectrum are a different breed and not simply because they possess above-average financial means.
Broadly speaking, an affluent client could well be more financially sophisticated than other clients and it’s possible – again painting in broad strokes – that a well-heeled client may be more demanding and selective. Those latter points should not be glossed over by advisors.
Get to Know Your ‘Advice Seeker’ Clients
Perhaps owing to higher levels of education or financial sophistication, many affluent clients are also considered “advice seekers.” That doesn’t mean they’re high maintenance, but does imply they’re willing to frequently tap their advisor for advice. Sounds good and it is, but advisors need to be aware of other factors.
“After beginning a relationship, 93% of Advice Seekers look to their current provider when considering adding a new product or service. Yet, a sizeable amount (41%) of this cohort plans to switch some or all their assets to another provider in the next 12 months,” notes Scott Smith of Cerulli & Associates.
Translation: yes, it’s an accomplishment to have earned the business of an affluent client, but there’s more work to be done because some of those clients are window shoppers. That says even if they sign on the dotted line with one advisor, they’re apt to continue shopping around and some will ultimately leave their current advisor.
Sounds daunting. And yes, there are examples of clients, regardless of income and wealth, being too much of a pain-in-the-you-know-what to make their business worth the trouble. Of course, many aren’t in that group and they’re worth holding on to. Advisors need to know how to do that.
Being Smart About Retention
“Holistic” and “adding value” are terms frequently bandied about in the advisory community, but they’re worth emphasizing when it comes to client retention. That’s particularly true when it comes to wealth advice seekers.
“Providers engaging with this cohort of investors will need to consistently remind them of the breadth and quality of their advisory services to remain top of mind,” adds Smith. “While an advice provider may initially serve the needs of an affluent investor, Advice Seekers’ preferences may change. Until they firmly establish a trusted advisor relationship, it’s likely they’ll look elsewhere.”
The point: it’s not about bragging. It’s about reminding clients of all asset/income levels that you’re on their side and you have the services and tools to help them realize their financial goals.