Why clients are abandoning their financial advisors at an unprecedented rate

A recent study conducted by YCharts found that nearly 3 out of 4 clients either switched—or considered switching—to a new financial advisor in 2023.

(The orange group represents clients who didn’t change, or consider changing advisors.)

So, why are clients abandoning their financial advisors en masse?

It may not be for the reason you think…

The #1 reason clients leave isn’t poor portfolio performance. (That’s the #2 reason.)

The top reason clients ditch their advisor is because they don’t feel like their advisor has a deep understanding of them, and their goals.

Clients feel unimportant. Overlooked. Like a number.

Lucky for you, there’s a simple fix: Increase the quality and quantity of your communication.

Clients who receive infrequent or rare communication from their advisor have a confidence level of only 22% in their financial plan should the US enter a recession. This is compared to 71% of those contacted frequently who feel very comfortable with their financial plan should the US enter a recession.

YCharts | Advisor Client Communication Survey, 2024

But if you’re like most advisors, thinking about spending more time calling and emailing your clients feels overwhelming. Your time and attention are already spread thin.

If that’s the case, this article is for you.

You’ll get a simple and efficient strategy to increase your personalized client outreach that will save you time and energy while helping your clients feel seen, understood, and valued.

The Ultimate Financial Advisor Communication Plan

Following this communication plan will have a massive positive impact on your practice.

Here’s how respondents of the YCharts survey with >$500k in AUM reported that an increase in frequency and/or personalized communication would affect them:

Step 1) Increase frequency of communication

Communicate with clients a minimum of once per quarter.

We’ve never heard of a client leaving an advisor due to overcommunication, so it’s safe to say you can err on the side of overcommunicating.

Clients’ preferred method of communication is still email, so we recommend starting a newsletter. (We use Beehiiv for ours. You can check it out here.)

Commit to a schedule for your updates—once a week, twice a month, or once a month. The frequency isn’t as important as the consistency.

What to write about:

I recommend keeping a list of topics you can include in your updates. Here are a few things the most successful financial advisors are including in their newsletters:

• • Current market trends

• • Answers to frequently asked questions

• • Common challenges your clients may be facing

• • Updates on your family/staff

• • Interesting articles, podcasts, or books

• • Reminders of services you provide

Bonus tip: You can easily segment your client list by categories—like age, life stage, or AUM—to ensure the right clients get the most relevant updates. (ie: Estate planning information goes out to clients over 50.)

Step 2) Increase the depth of your communication

Actively learn more your clients’ goals, values, and beliefs.

Clients want to feel like their financial advisor deeply understands them.

That means your client relationships must go beyond merely knowing their marital status, risk tolerance, and when they want to retire.

Clients are enlisting your help to build their legacy. That’s a big deal! 

They’re relying on you to craft a strategy that will enable them to maximize the positive impact they can leave on their family, community, and even the world.

They want to know the person helping them realize their dreams understands their “Why.”

“Regardless of WHAT we do in our lives, our WHY—our driving purpose, cause or belief—never changes.”

Simon Sinek

How to get to know their “Why.”

The COREnology tools were built to give advisors like you a simple and easy way to help you deeply understand your clients.

With the click a button, you can send your client and their partner/family a COREvalues assessment. The report gives you (and your client) deep insights into what each member of the family values most, how they approach decision-making, and how they view the world.

Want to see a client light up? Ask them where they got their COREvalues from.

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Next, send clients the COREviews assessment to learn about their history with money, their financial goals, and their beliefs around inheritance. This will help you discover areas where a couple’s financial goals are misaligned.

This report will give you insights into what resources you could send to a client to help them overcome their own personal obstacles.

It will also facilitate conversations your married clients may have been avoiding or haven’t thought to have yet.

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A few months later, send them the COREculture report to get insights into whether or not each family member has a clear sense of purpose, and belonging, and feels understood.

When you use COREnology’s tools to show your clients things they never knew about themselves (and their loved ones), they’ll develop a sense that you understand them better than they understand themselves.

Learn More About Corenology

Step 3) Keep It Simple, Stupid

Your communication strategy doesn’t need to be complicated—for you or for your clients. It should be simple.

Here are 3 tips to help you keep your communication strategy super simple:

1. 1. Use language a 6th grader can understand
      Clients hire you to simplify complicated financial technobabble for them.
      
      
   2. Focus on your clients—not yourself
      Don’t turn your newsletter into a commercial for yourself.

      Your communication should be centered around your clients’ problems first—then you can talk about how you can help solve them.

      Start with their goals—then how you can help achieve them.

      Lead in with their worries—then show how you can help address them.

   3. Build out a content calendar

      Don’t leave your messages to the last minute. Write and schedule them in advance.

      Procrastinating your newsletter will only make you resentful. You’ll start avoiding it and lose all the perks of being a highly communicative advisor.

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The most exciting thing about this research is that it shows that it really doesn’t take much to stand out in the competitive marketplace of financial advisors.

With the right tools and strategy, you can retain your current clients’ business—and turn them into advocates who actively refer business to you.