President's Letter: Top 5 Ways to Create Loyal Clients


Financial advisors with loyal clients are more likely to have long-term success, regardless of how one might define that success - ongoing income stream, ability to transfer or sell your business upon retirement or other options preferred by the advisor.  Loyal clients will give their advisor a greater share of wallet and they will stick with them should he or she decide to another brokerage firm or other provider.*  Loyal clients allow advisors to spend less time on acquiring new clients and more time on ensuring advisors are meeting the needs of the investors.

What are the top 5 ways to create loyal clients?  It might be easy to believe that loyalty is based upon delivering top investment results with low fees, but in Spectrem’s recent report, What Makes a Client Loyal?:  Advisor Relationships and Loyalty*, investors identified the top factors creating loyalty as follows:

1.      Good Service.  Good service was ranked as the #1 factor for creating loyalty.  Good service can simply be defined as responsiveness to questions and ensuring that information provided to the investor is correct.  Financial advisors are dealing with the investor’s assets, and for most individuals this is a very personal relationship.  A quick response to telephone, email or other inquiries is critical.

2.      Competent personnel.  There is nothing more frustrating that dealing with an individual that screws up appointment times, fails to pass along messages and makes an investor repeat information multiple times.  Additionally, financial advisors must demonstrate they have at least as much understanding regarding an investment as the investor.  Remember, cable news networks and other periodicals are providing information about investments 24/7.  Advisors need to be aware of hot topics and respond appropriately.

3.      Absence of errors.  Investors expect their transactions to be completed without errors and their financial information to be reported correctly.  Nothing will create a loss of trust with a client faster than incorrect reporting regarding their assets.

4.     Track record without problems.  This doesn’t mean that an advisor needs to have the best track record.  It simply means that the investment track record seems consistent with what is happening in the market and the economy.  That the advisor hasn’t taken any crazy risks resulting in great losses.  “Strong investment track record” actually ranked No. 9 in the overall results.

5.     Advisor availability.  It doesn’t matter if a client has $50,000 or $50 million, the expectation is that an advisor will have time to discuss your questions and that your account is important to the advisor.  If an advisor always has staff members answer questions, an investor may begin to feel that they aren’t important to the advisor.



As you can see from the chart above, all of these factors are rated highly and only a small percentage of difference exists between many of these attributes. Thus, it’s important for advisors to provide clients with all of the above services.  Client loyalty demonstrates long-term success.  What can you do to make sure your clients become loyal?


*All research is included in Spectrem's wealth subscription packages