Five Ways to Retain Your Wealth Management Clients in 2020


Investor demographics are changing, and it’s impacting the wealth management industry. About 25% of millennials have $100,000 or more in savings, and they have different ideas, goals, and aspirations for their money.

Many wealth management firms find their profits are
slipping as investors switch to passive index funds. In response, many fund
managers have adopted machine learning to find cognitive biases in their
clients’ approaches so that they can demonstrate the value of managing investor

The fight-or-flight instinct is part of our human nature, but it doesn’t serve investors well. Fleeing the market at the first sign of turbulence won’t impress clients. If advisers can demonstrate how behavioral coaching is valuable, then clients are more likely to stick with it.

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The competition is fierce.

Passive index funds aren’t the only threat to the wealth management industry: Competition presses in on all sides. Technological advancements, in particular, intimidate financial advisers. The world views investments as a commodity, so people prioritize convenience over all else.

Robo-advisors pose a threat because they provide convenience and promise a human-like experience. People can call and ask questions like, “What account should I pull money out of first for retirement?” and “What are my options for long-term care?” Computers are designed to process inquiries like these, and the next decade of quantum computing and 5G will make processing even easier. At the same time, increasing artificial intelligence (AI) technology will expand the capabilities of robo-advisors.

Unfortunately, this technology drives down the cost of advice, thanks to the principle of supply and demand. Increased capabilities lead to increased trust, so more and more people will rely on AI in the next three to five years. The situation is comparable to computer programs reading mammograms: They’re more accurate than doctors. Human advisers must find a way to prove they’re more valuable and precise than their robotic counterparts.

A robo-advisor may be efficient, but it can’t replace a human’s empathy and active listening skills. Wealth management is as much an art as a science, and it requires the human element of creative problem-solving.

So how do you capitalize on this value? By becoming a resource for clients in all aspects of their financial lives. Remind clients you’re there to help on their journeys to building meaningful and joyful lives.

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I’ve had one particular client for more than 30 years. We started our relationship planning for his retirement. Together, we ran the numbers on major life decisions: moving, buying a beach house, transitioning careers, etc.

We would engage in life discussions about family, health, children, work, community efforts, mentorship — you name it. At the start, I was his financial expert, but over time we’ve become close friends.

That client stays with us not only because of my
financial advice, but because I’ve gotten to know who he is as a person. A
computer can evaluate how to do something, but it can’t
process the why like a human can.

Here’s how you can provide valuable services to
modern investors:

1. Shift from being an expert to an adviser.

Only 44% of high-net-worth clients say they trust their financial advisers’ guidance, so there’s a lot of room for improvement. Build rapport with your clients and establish checkpoints for having value discussions. Determine how you’ve helped them, then ask, “What’s been meaningful to you?”

By offering an opportunity to give feedback, you let your client know that you take their journey seriously. Clients may appreciate a job well done, but they’ll cherish advice that considers their life priorities. Foster a strong relationship with your clients to help them reach their own conclusions.

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2. Broaden your range of services.

As people become busier, they want to work with companies that offer one-stop shops for all their needs. Offering only investment management or financial planning isn’t enough for your modern-day clients. They want comprehensive financial services that offer departments licensed to cover everything from income tax and education planning to investment management and legacy planning. If clients feel that they can outsource everything to you, then they’ll stick with you for a long time.

3. Expand your network.

It’s hard for clients to know whom to trust. Build relationships with other professionals so you can serve as a resource for your clients. If you have a large network that you can refer to clients (housing arrangements, lawyers, banks, lenders, etc.), you’ll come across as extremely valuable and credible. Be sure to communicate whether you and these partners compensate each other for leads or referrals.

4. Regularly reach out to clients.

Great advisers do not buy into the “wait until they call” approach. Make sure to establish regular check-ins with your clients. Give yourself a task in Salesforce, or whatever customer relationship management program you use, to reach out every 30, 60, or 90 days, depending on the client’s preferences. Saying, “I’d love to catch up!” goes a long way.

When on the call, ask them whether they’re on track to reach their goals. Also, learn what’s going on in their lives and follow up by asking whether there’s anything you can help them with. Maybe your client’s daughter is getting married and trying to figure out how she wants to handle joint finances with her new husband. This is a tremendous opportunity for you to step in and help.

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5. Be proactive, not reactive.

Proactively monitoring clients’ accounts will set you apart from all other competition. As you work with your clients, stay on top of sending meeting notes and checking in on follow-up items. Ask them up front what their preferred methods of communications are and how often they’d like you to check in. Point out timely news or articles that are relevant to their goals, then see whether they’d like to discuss them.

Retaining clients in an information-saturated digital world means you must communicate the benefits of working with you. By being proactive, offering comprehensive services, and demonstrating that you’re a one-stop shop, you’ll retain clients for years and, hopefully, generations to come.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images/skodonnell

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David Geller

JOYN CEO David Geller has gone beyond wealth management to discover ways to bring meaning and joy to his clients’ lives. His quest resulted in JOYN’s Behavioral Wealth Management™ approach to financial advising, which merges wealth management with expertise in behavioral financial science to help clients make better decisions.

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