It has come to my attention that the advisor-client relationship may be sinking and that you need to do something about it.My friends at SEI, a leading global provider of outsourced asset management, investment processing, and investment operations solutions, has done us all a big favor with its latest survey of some 100 clients of the SEI Advisor Network because it reveals that 28 percent of advisors attribute client relationship failures to a lack of understanding. The result is that advisors need to communicate more clearly to avoid straining or losing clients.
SEI says that 40 percent cite the fact that unrealistic expectations can be a primary driver of the downfall of failed relationships and that advisors also tend to blame those expectations on a lack of clear and consistent communication.
Actually, SEI points out that participating advisors in the survey had provided feedback and advice regarding indicators that the client relationship might be headed for trouble. Here are some of those:
Your clients are consistently contacting you more than you’re contacting them. Some 53 percent of advisors stated that frequent, proactive communication was at the heart of their strongest client relationships. In effect, clients should receive advice from the advisor and not have to ask for it. It’s a matter of staying visible. Clients are telling you what they want to do, not asking you what they should do. Advisors give advice; they don’t simply fill orders. Keep in mind, says SEI, that when you’re relegated to the order-filling role, then you become less valuable and more dispensable to your clients. Your ability, they note, is also based on investment performance. One recommendation is to educate the clients on the process as much as possible, keeping the activity simple, yet transparent.
You’re the last to hear of a monumental event in a client’s life. How about a child’s engagement, an extended vacation, even a new car? Admittedly, not every client is going to call you with news in the middle of the night but if they are making major life decisions without your input, chances are they may be getting advice from someone else. SEI says that this is a sure-fire sign that the client may be beginning to question your advice and could be on the brink of abandonment.
Beginning conversations about their lives and their money will help you know what’s really on their minds and what might be on the horizon. Ultimately, stresses SEI, your client will trust that you’re really interested in more than their financial health and will be less likely to leave.
Overall, SEI’s advisors overwhelmingly recommend communicating as frequently as possible from the start of the relationship, before problems arise. They strongly believe that building a foundation of trust and open communication demonstrates your commitment to a comprehensive understanding of your client’s situation and reassures that he or she is not just a number.
