How to Build Client Loyalty

In the financial world, it’s much easier – and more profitable – to keep existing clients happy than to keep pursuing new clients each month. The most satisfied clients are said to be the best for any business, including the independent financial advisor. Loyal clients typically lead to repeat or add-on business, as well as referrals, making them the most valuable.

Build Client Loyalty

How to Build Client Loyalty

According to data by Russ Alan Prince and David A. Geracioti, 94.5 percent of advisors’ clients identified as “loyal” said they were extremely or very likely to give their primary financial advisors additional investable assets. Just 33.5 percent of “satisfied” clients and 13.4 percent of “moderately satisfied” clients agreed. In addition, loyal clients, on average provided 11.8 referrals to their primary financial advisors. That number plummeted to 2.1 referrals from satisfied clients and just 0.1 referrals from moderately satisfied clients.

Jonathon Powell of CEG Worldwide, a coaching consulting group for financial advisors, believes to generate those kinds of great results, you must maximize client loyalty. Six core characteristics Powell says clients want their financial advisors to demonstrate:

Character. Character is what clients look for first. It is an attribute that you must have to get into the game and you must continuously demonstrate, particularly when markets fall and panic ensues. Since you really can’t “fake” character, it’s important to make trustworthiness, honesty and integrity ever-deepening parts of who you are as a financial advisor. The best way to do this is to have detailed and high-quality conversations with your clients which allow them understand how important they are to you.

Chemistry. You have chemistry when you “connect” with your clients. You know what they want to talk about and you see eye to eye on important issues. Chemistry either happens or it doesn’t. Chances are if you wake up sweating over a client in the middle of the night because you are worried your attempts to communicate effectively about some ongoing issue have failed, then chemistry is probably missing. If chemistry is missing, it might not make sense to keep the person on as a client, because it’s unlikely that you’ll ever be able to gain the person’s loyalty.

Caring. You must be genuinely concerned about your clients’ well-being. They should be more important to you as people than simply as sources of income. You should not only know their goals and objectives, but also work collaboratively with them to achieve those goals. Caring is demonstrated by a client-first attitude and follow-up behaviors show clients they really matter to you. Like chemistry and character, a sincere caring attitude cannot be faked. Most people can tell right away whether you really care about them.

Competence. Competence is about being smart, technically capable and a leader in your field. There is a high bar here, as clients will automatically expect you to demonstrate unquestionable competence. To be successful, you must demonstrate and communicate you are extremely technically competent on everything from investment management to providing timely statements. One way to show competence is to use credibility marketing strategies, such as publishing articles for your target market in the appropriate trade or association magazines. This will help establish you as an authority in your field.

Cost-effectiveness. Being cost-effective means delivering true value to your clients for the cost of your services and products. Don’t confuse cost with value. Affluent clients are generally willing to pay premium prices, but only when they believe it is worth the cost. Ultimately, it’s a value proposition issue, not a dollars-and-cents issue.

Consultative. Today’s clients want a partner, not someone who will boss them around. A consultative relationship can be built only through a series of ongoing, in-depth meetings where financial advisor and client work closely together to bring forth all essential client information, from assets and advisors to goals and dreams. A consultative relationship also results from making a large number of client contacts. Research from Prince and Geracioti shows that advisors’ most loyal clients were contacted between 24 and 28 times a year and most of those contacts were focused on personal and family-related issues and not on investments or portfolio considerations.

For more information on Summit Brokerage Services, an Independent Broker-Dealer, visit or contact us at (800) 354-5528.

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