IFP [print-me]

Client Retention Through a Transition

by Ned Van Riper

Video Transcript

When I work with advisors, especially wirehouse advisors that consider breaking away from their firm, they always ask me about client retention. What drives client retention during a transition?

In my experience, the answer is simple: it’s the advisor’s service model. Meaning, how often do they meet and speak with their clients? And the answer to that will drive client retention. With strong client relationships, client retention is often 75% or more during a transition. Often times it’s within 90 days of a transition.

Horror Stories

We’ve all heard horror stories about the lone advisor that made a move and didn’t bring any clients with them or a very low percentage of his or her book during a transition. I think that’s probably happened and if so it’s likely because they didn’t serve their clients. With that said, I think it’s become more of an urban legend within the industry and it’s just a scare tactic and fun to talk about.

But leaving a brand name firm may not be a big deal when the relationship exists between the client and the advisor. It’s not between the client and the firm. So, if as an advisor you have a very strong client service model, there’s a good probability that many of your clients will come with you.

A True Story

Many years ago, I helped an advisor in Cleveland, Ohio move his practice and he tells a great story about client retention. He segmented his book – A, B, C and D, as most as advisors do – and the A clients received absolute white glove treatment. He wanted to do whatever it took to get those clients, his best clients, to move with him. His B clients received just one notch under the A clients. Pretty much the same great service and attention. And his C and D clients received communication, a couple phone calls about his move, but if they didn’t respond to him, he didn’t bring them with him. After his move he said he was more efficient and more profitable than he ever has been in his business life and he was very thankful for it. Every story is different, but this illustrates one potential scenario.

Thank you for checking out this entry into our recruiting series and we hope to see you next time.

Posted by: Ned Van Riper | July 9th, 2018 at 11:12am.