For financial advisers, regular communication may be directly related to client retention recent studies have found.
One study carried out by the Association of Financial Advisers, revealed that clients gave the highest satisfaction rankings to financial advisers who kept in touch more than eight times a year.
In fact, advisers who communicated that regularly received an average satisfaction score of 9.5. This compared with an average satisfaction score of just 6.9 for financial advisers who communicated just twice a year.
The study also found that for generations X and Y, the overwhelmingly preferred method of communication was via email. However, social media and other digital channels were becoming increasingly important.
Another study carried out by Macquarie Bank found a direct correlation between satisfied clients and referral rates. It also noted that the likelihood of a referral did not rise incrementally as satisfaction increased. Instead, clients were significantly more likely to refer an adviser they rated a 9 out of 10 in satisfaction than one rated six.
Regular client communication is vital
The link between communication and retention is not specific to Australian financial advisers. The Wall Street Journal reported that one US-based adviser boosted his retention rate from 90% to 98% simply by implementing a program of regular client communication.
While the link between communication and retention might be well documented and researched, the problem for advisers is that they are overwhelmingly time poor. In fact, one survey found that time management was the number one concern for Australia’s financial advisers.
Little wonder then that many financial advisers simply cannot find the time to implement a regular and systematic client communication program – even though this is something that could significantly reduce the rate of client churn.
That’s partly why we developed Adviser Updates, which aims to keep you in constant touch with your clients and show them the ongoing value you bring. Adviser Updates also provides an ongoing basis for dialogue with your existing clients and gives you a cost-effective and time-effective way to bring in new work.