Broker Check

How You Can Build Exclusive Relationships With Clients

August 10, 2018
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Statistics show clients frequently work with several financial professionals to manage their investments. Unfortunately, this can create many inherent problems because a financial advisor’s job is to look at the complete picture of a client’s financial life, analyze their goals and help them make positive financial decisions.

Here are a few important things to consider when explaining to clients the benefits of consolidating with you:

Multiple advisors create redundancies
If a client is working with multiple advisors, are their responsibilities, strategies and recommendations coordinated? What if one advisor makes a recommendation that duplicates or contradicts the existing strategy of another advisor? If one advisor isn’t aware of what the others are doing, this can lead to portfolio overlap (which may create unnecessary risk), lack of diversification and suboptimal overall asset allocation.

They may be paying higher fees
A client could incur greater expenses by employing multiple advisors who perform redundant tasks. Most investment companies and their advisors charge an annual fee that’s a percentage of a client’s assets. That fee is typically set on a sliding scale – the more a client invests in one place, the lower their annual rate. Investing among multiple advisors may dilute their ability to earn a break on fees.

Who’s in charge?
If a client is working with multiple advisors, it’s critical they’re all on the same page to ensure they don’t work against each other. As a result, the client typically ends up being the quarterback coordinating the activities of all their advisors. That’s a lot of work and defeats the primary purpose of hiring an advisor – to delegate the responsibility of managing their finances. But when one advisor coordinates everything, it relieves the client of the workload and reduces the risk that the left hand doesn’t know what the right hand is doing.

It’s time consuming
Time is precious, which is why clients prefer to work with a specialist who focuses on comprehensive wealth management and financial planning. People lead busy, complicated lives, so anything an advisor can do to make their clients’ lives easier is a step in the right direction. 

Draw a line in the sand
Tell clients you won’t share them with other advisors. This may seem drastic, but if you believe it’s in their best interests to have a single advisor of choice, it’s a conversation you need to have. Of course, you have to be willing to let them go. It shows you are serious and fully committed to providing the best service. If your client accepts your recommendation, it means your future relationship is built on a high level of trust and confidence.

For more tips on building exclusive relationships with clients, contact Iron Point for a no-obligation coaching.