The Question Every Advisor Hopes Their Clients Ask

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After nearly 30 years of consulting with advisors, representing one-person shops, broker-dealer reps and multi-billion dollar wealth-management practices, there is one question every advisor should hope their clients ask. But too often they are ill-equipped to answer it.

I’ll reveal that question in a moment. First, however, let’s look at why this is so important.

As advisors strive to differentiate themselves amongst what has become a commoditized marketplace for financial advice and services, it has become increasingly important to cultivate loyal and happy clients. Clearly, acquiring new clients is essential to growth, however, it’s the retention of those clients that creates stability and long-term equity.

Advisors typically have many “Newton’s first law” clients – those who remain simply due to inertia until moved by an outside force better known as a competitor. Other clients may be of the “Nomad” variety – fickle and vulnerable to seeking a new advisor due to isolated service issues or underperformance.

In December of 2013, PriceMetrix, a research firm providing practice management analytics for advisors, published a popular and detailed analysis of the characteristics of both advisors and clients that drive client retention.