4 Reasons Why Clients Fire Their Financial Advisors

Nowadays, there is no lack of financial management firms, as more and more are emerging in the market. It is also easier for clients to carry out research about thousands of firms in the industry in this age of the Internet.

Clients now have a much clearer vision and know they have many options when a firm doesn’t perform as per their expectations. So, it is important for financial advisors to make sure that they prioritize their client satisfaction above anything else. Only then will they be able to retain them.

However, there are a lot of clients who choose to leave their financial advisors after working with them for some while. Here are the top reasons why!

Why Do Clients Let Go Of Their Financial Advisors?

1.     Poor Communication

According to many investors, the main reason they leave their financial advisor is the lack of proper communication and that too on a timely basis.

If a financial advisor fails to build a personal connection with their clients, they are more likely to leave them as compared to one who does. Especially in this age, when markets are more volatile than ever, financial advisors should always keep in touch with their clients. Plus, without regular contact, financial advisors are less likely to have a complete understanding of their client’s investment goals and needs.

Here are some of the reasons why you should keep in touch with your clients.

• More frequent and personalized contact with the advisor can give clients more confidence in their financial plans.
• When deciding to retain the services of a financial advisor, clients consider frequency and style of communication some of the most important factors.
• Clients prefer advisors who frequently send them personalized updates about their investments.

2.     Poor Performance

When a portfolio keeps delivering low or negative returns for an extended period of time, clients feel as if all is lost, and they eventually fire their advisor. It rarely matters how polite and personable of an advisor you are. If you fail to deliver the results the client hired you for, you will forever be labeled as a bad financial advisor in their eyes.

So, it is important for financial advisors to see why their portfolios are not performing well. They should devote a good amount of time and energy in research of the markets and then offer solutions to their clients.

3.     High Fees

Poor performance is one thing, but if you are charging high fees on top of that, a client is guaranteed to leave you.

Yes, financial advisors are not completely in charge of fees, as there is more of downward pressure on that. However, it is important to understand that in order to compete with the big-time financial firms out there, fee plays a major role.

In the industry climate nowadays, there will have to be some give-and-take. A financial advisor will have to offer an affordable fee to their clients. Nonetheless, they can look for a way to cut costs in other areas to offset the low fees.

4.     Lack Of Trust

Do you sell financial opportunities that will benefit you rather than helping your clients? Did you overpromise and under-deliver on the returns?

You’re doomed to lose the client if you think it’s simpler to make money through new assets rather than expanding the existing base by making sound investments.

You’ll make money in the short term, but your plan will fail in the long run when the investor sees minimal returns and contemplates moving their funds elsewhere.

So, you must ensure that you align yourself with the interest of your clients.

Give Your Clients Reasons To Stay

A little bit of good communication may go a long way. Pay attention to the needs of your customers. Be open and honest.

Since poor communication leads to mistrust, clients are quick to drop financial advisors who practice that. Plus, they will be less tolerant of bad performance and expensive fees in that case.