Build Loyalty through Annual Client Reviews: Four Questions All Advisors Must Ask Their Clients

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.Ani Yessaillian

The key to building a business is loyalty, and the key to building loyalty is by earning client trust.

Even experienced financial advisors are finding it difficult to attract new clients. More than usual, successful firms are growing their businesses by winning over investors who are dissatisfied with their current advisors.

That's why, to succeed, you must focus on cultivating client loyalty. In today's highly competitive marketplace, you'll never be able to grow your business if you're losing clients. Trust fosters loyalty – but how do you build that kind of trust with your clients?
The annual review is one of your best opportunities to build trust.

Successful firms expand the review meeting agenda beyond investment performance, investment policies, and market outlook to uncover client needs and concerns. Use this meeting to assess unmet needs and identify areas of dissatisfaction. Then, use this knowledge to act in ways that strengthen trust and deepen loyalty.

Four questions to ask during the annual review

Based on research I’ve conducted with advisors and high-net-worth investors, I’ve identified four questions you should ask during the annual review to help build a loyal client base.

Question #1: “What are your biggest financial concerns?”

Surprisingly, many advisors neglect to ask this question. No matter how well your clients’ portfolios performed over the past year, you should ask about their concerns in every review.

Economic conditions have changed since your last review, and so have the concerns of your clients. Areas where they were at ease 18 months ago may now be sources of tremendous worry. Alternatively, a concern from last year may not be as important to them this year.

If you don't ask this question in every review, you risk not learning about their needs. And if you don't know about their needs, you won't be able to help them in ways that they most value.

My firm recently interviewed more than a dozen individuals in their late 30s to late 50s who held investments well in excess of $1 million. The interviews revealed several major concerns:

  • Having enough funds to cover higher education for their children
  • How much money they will need for retirement, especially for health care costs
  • The possibility that rising tax rates in the future will reduce their after-tax income from accounts intended to generate income in retirement
  • Unanticipated cash outflows to cover costs associated with care for elderly parents
  • Ongoing changes in tax laws that might adversely affect the amounts of their estates available for children and charity