Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor,” can be found on Amazon.

It happens.  People give up.  We’ve heard you shouldn’t change horses in midstream.  The same goes for acting in haste.  A client tells you they are packing it in.  Selling out and transferring the assets elsewhere.  What can you do?

client retention strategies

Top 5 Client Retention Strategies

Strategy #1 – The Showdown

An advisor in New England would sit down with his client in a restaurant.  (This isn’t practical at this moment.)  After drinks have arrived and food is ordered he would say:  “Things haven’t been good between us lately.”  He stops talking.  The client, both if it’s a joint account, unload about everything that has gone wrong.  The advisor doesn’t counter point for point.  He listens.  When they have gotten everything off their chest, he might bring up a few points to state his position.  More importantly, he looks them in the eyes and says: “What can we do to move forward?”  In today’s environment, this may be a video call.  It’s very difficult for a client to say: “We can’t move forward” when the advisor has made themselves a target of their anger and frustration.

Strategy #2 – Lean on your history

Advisors cultivate long term relationships.  Clients might feel “This time it’s different” but they likely said that in the past.  The advisor points out times when things looked pretty dark before, yet the client and advisor, working together, got through it.  The stock market decline during the Great Recession saw the DJIA decline from 14,164 to 6,469 on March 6th, 2009.  About ten years later, on February 12th, 2020 the DJIA hit a high of 29,551.  You stuck together.  You’ve gotten through difficult periods before.

Strategy #3 – Is it a question of money?

They might want to cash out because they have a financial shortfall and need funds to plug the gap.  They might be fine with you, but their account represents the first source of funds that comes to mind.  They may be taking a loss.  There may be other ways for them to get access to cash, especially when interest rates are at historic lows.  Can they borrow against their securities at your firm?  Do they own insurance products that have built up cash value?  Are loans a practical option?  Can they see a path towards paying the money back?  Draw them out.  This may be the issue.  They are thinking of closing the account because they can’t think of other options.

Strategy #4 – What will it take to become whole again?

The dollar in stocks as of December 31st might be 85 cents now.  If they cash out, the money will need to be put to work somewhere else.  How long might it take, or what kind of return will they need to see to get back to where they were on December 31st?  Is that option any better than staying put and following your advice?  You have likely had the “long term” conversation.  If they own good investments, there is an excellent case for staying with you.  They might just need some reminding.

Strategy #5 – Actions have consequences

They might have met an agent or advisor they like better.  They suggest cashing out, moving the money over, and going in a different direction.  Principal protection can sound compelling when the stock market is volatile.  What are the costs of cashing out?  There are tax consequences, especially if they have gains.  There might be surrender charges on certain products.  Has this been explained adequately?  Perhaps not.  Your client might be dissatisfied with their holdings now, but may not understand the costs involved.

You can’t stop people from leaving.  It’s their money.  You can’t accurately predict the future.  You can let them know they are an important client and you have their best interests at heart.

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