Do the Client Retention Two-Step to Boost Profitability in a Down Market

By Amy McIIwain, President, Financial Social Media on Thursday, September 22nd, 2011

The last few weeks have been painful for all of us in the investment community to watch. The headlines seem to be fueling unrest in the markets, and uncertainty about the future seems pervasive. However, for advisors, the market turmoil can be an opportunity to strengthen client relationships. Almost every day, you’ll find an opportunity to increase your client retention and revenue. This can be accomplished in a couple of ways.  

First, just like 2008, do not hide under your desk. 

Don’t bury yourself in market data and analyst reports looking for clues. The antidote for trouble is picking up the phone and talking to your clients.  Remind them why they are invested with you in the first place. Reinforce why you think the investment portfolio you’ve helped them create is right for their needs. Talk about their concerns. You’ll find that calls like these will help put your clients at ease. Certainly, no advisor has a crystal ball, but we can be the calm voice of reason in the midst of this economic chaos.  

Second, expand the breadth and depth of your client relationships.

It’s easier to broaden a current client relationship than it is to start a new one. The process may be as simple as introducing the benefit of financial planning to a pure investment client. Your client might be able to sleep better by seeing a cash flow analysis or multiple retirement projections. 

You can also educate your clients on the benefits of aggregating accounts. Explain to them that aggregation enables you to manage their retirement assets as well. If your clients haven't had you look at their retirement accounts yet, now is the perfect time. 

Both of these strategies—picking up and phone and offering additional services—will serve as a two-step process for creating sticky clients. 

The solution is simple…

Remember, market fluctuations can dilute your revenue by up to 2-3% on any given day. However, with just a few phone calls—and a productive conversation or two—you can increase client retention, boost profitability, and more than offset the losses that are incurred due to market swings. Likewise for weathering the storm when markets are trending downward, and it’s more critical than ever to get the most out of every client relationship. 

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