A lack of investor confidence in the market has triggered advisors to work feverishly to strengthen client retention techniques over acquiring newer ones, according to a recent survey from SEI.
According to the survey, more than half of the advisors (51%) said their clients are still “extremely skeptical about the economy and very concerned with future growth.” As a result, advisors are heightening their focus on keeping their existing clients. Roughly 52% have chosen to rely on “bring a friend” events, which provides an “informal, non-threatening way for a client to meet someone,” said John Anderson, SEI’s managing director, practice management.
“It is the advisor’s responsibility to make sure they are responsive to their clients’ needs and concerns,” Anderson said in an email response. “I think it was a natural reaction of advisors to circle the wagons during the crisis and take care of their clients.”
Steve Onofrio, managing director of SEI Advisor Network said in a press release that advisor-client relationships have been redefined. “Investors, scarred by 2008 and recent market volatility are looking for advisors to provide a heightened level of proactive guidance,” he said in the release.
As advisors explore various avenues in client retention, there are basics to keep in mind. “We always recommend to our advisors that you never mix appreciation events, educational or product events together, there must be a clear understanding of the content for the client to feel comfortable to bringing a guest,” said Anderson.
As far as client acquisition is concerned, though, advisors are increasingly turning to CPAs and accountants for assistance in creating new business prospects. “The CPA consistently ranks as one of the most trusted advisors; a referral from a CPA to an advisor carries that same trust and respect,” said Anderson.
The study was carried out at SEI’s National Strategic Advisor Conference for 150 strategic advisors where one-quarter of the participants have more than $250 million of assets under management with nearly three quarters having close to 15 years of industry experience.