There is a fair amount of turnover in the financial industry. Building a healthy, stable practice is a challenging task and plenty of new Advisors try it for a year or two only to find they just can’t hack it. They give up and pack it in. But what happens to the clients they brought on?
On the other end of the spectrum, the Advisors who did make a go of it and have been running successful practices, sometimes for decades, eventually retire. Some have succession plans in place and plenty don’t.
Both scenarios are huge potential opportunities for Advisors looking to grow their book.
Buying or inheriting a book of clients can feel like a big windfall, but in fact, if you don’t know how to navigate this process, you’ve actually inherited a mitt-full of challenges.
What was the state of the client relationships prior to the transfer? Were these dormant or active accounts? How regular was the communication between the previous Advisor and each client? Had the Advisor provided excellent or poor service? Did they have a detailed plan for a smooth transition? Did they personally communicate this to each client? Did they position you well as the new Advisor? What messes did they leave for you to clean up?
Ideally, you will investigate and find out the answers to all these questions before making an investment, but for today, let’s assume the most common scenario:
The previous Advisor sent a form letter to all clients announcing the change, then handed the reins over to you.
This is a critical juncture. At this moment, every one of your new clients is poach-able. The form letter that was sent out acts as a trigger for clients to take notice of other Advisors and other potential firms. Some of them may be calling your new clients as we speak. These clients currently feel no loyalty or attachment to you, which makes them poach-able. You’ve got your work cut out for you!
Here are 10 tips for you to make a roaring success of on-boarding these new relationships!
Review Your Book
Go through each new client portfolio and make the following notes on each of them: active or dormant, high or low priority, mess to clean-up, and one or two ideas to save or earn each of them more money. (Notice we are focused on serving here, not on ‘getting’ more business.)
Put all the ‘Active, High-Priority’ clients at the top of the pile. These high-value relationships must be attended to first.
Create a Warm Letter of Introduction
This letter should have a personal touch and feel like the opposite of a form letter to the recipient. Welcome them to your practice, share some non-business personal details about yourself, such as …lived and worked in this neighbourhood for most of my life…my spouse and children…a couple favourite hobbies and where you may bump into your new clients…the local market or gym, etc… Then include a few thoughts about your core values and what they can expect from you. Let them know you’ll be reaching out personally. Include all your contact info. Send this letter this letter to all new clients.
Call Your New Clients
FYI, saying ‘I’d love to get together and introduce myself’ is not compelling enough for most people to agree to a meeting. Make a personal connection first. Then let them know you’ve reviewed their accounts and have one or two ideas to immediately improve their situation.
Set Measurable Relationship Expectations
Tell them what service standards they can expect – and then live up to them!
At your first meeting, ask lots of questions and listen carefully. What did they like/not like about their former relationship? What would an ideal Client-Advisor relationship look like for them? Ask them about their family. Take time to get to know them personally. Look for common ground.
Only after all of the above has been completed, ask about and make suggestions on new products and services.
Create Communication Plan
For the first while, your new clients are testing the relationship. They are still poachable. Schedule value-added client contact every six-to-eight weeks for the first six months.
Ask for Feedback
At the six-month point, invite them for lunch and get feedback from them. Let your client know that you want to make sure they receive exemplary service. Ask how they’d grade the relationship and if you’re not at a 10/10, what would it take to get there.
Rinse and Repeat!
You’ve now created trust and some personal connection. Put a plan in place to deepen this relationship over the long-term.
Yes, there is quite a bit of work involved in successfully transitioning your windfall of purchased or inherited clients. But when you think about how challenging it is to win new ones through prospecting, it’s obviously worth your time and effort.
Here’s to your success!