Skip navigation

Is Your Millionaire Client About to Switch Advisors?

Financial advisors don’t know if their millionaire clients are planning on leaving them, according to Fidelity’s Millionaire Outlook Study.

A quarter of millionaire investors are satisfied but unenthusiastic about their advisors, meaning they are liable to leave. Twenty percent are considered to be outright detractors—unhappy clients with high rates of defection. 

Advisors don’t know their high net worth clients are unhappy because they’re not asking. Almost half of all detractors say their ex-advisor never asked them for feedback. And that will seriously hurt their practice, says Bob Oros, head of the registered investment advisor (RIA) segment, Fidelity Clearing & Custody Solutions.

“We have entered a ‘referral economy' where we, as consumers, thrive on sharing the people and things we value with those in our social and professional networks,” Oros said. 

Forty-eight percent of new business for advisors comes from client referrals, and of the millionaire investors working with a financial advisor, 55 percent are considered “promoters,” or clients who actively recommend their advisor.

More poignant is that 65 percent of promoters consider their advisors to be friends, suggesting an intimacy that goes beyond a typical client-advisor relationship.

To help advisors capitalize on this information, Fidelity outlines what they consider “the new basics” to turn passive and detractor clients into promoters.

Firstly, advisors should document and maintain a holistic financial plan. While benchmark numbers are good, focusing on how investment decisions affect a client’s life is much more important. “Investment is a conduit to the goal, but it’s about the goal,” said Oros.

Secondly, Fidelity’s study found that 70 percent of promoters say their advisors know personal details about their lives and 86 percent involve family members in financial planning discussions, so advisors should work on building family connections.

Oros suggests advisors not only keep track of the larger goals clients have but also keep tabs on less significant life events, in order show clients they care. That may mean something as simple as giving an investor a quick call to congratulate them on their child’s graduation. “It’s really a combination of big events and small events,” Oros added. “And some advisors are missing that.”

Another big part of the problem, according to Oros, is that advisors use strategies that worked 10 to 15 years ago, namely the “rinse-and-repeat” method of keeping a yearly standing appointment with clients, and then forgetting about them for 12 months.

To help with that, as the third part to the “new basics” strategy, Fidelity recommends advisors directly ask clients what they need from their financial planner and then listen to feedback.

“For most advisors, it’s the end-client experience the advisor’s way,” said Oros. “Serve me the way I want to be served.”

TAGS: Industry
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.