In order to “insure” your current client base from unwanted defections, says Julie Littlechild, CEO of Advisor Impact Inc. in Toronto, you must identify the variables you can control and those you can’t.

“Clients may leave for many reasons,” Littlechild says. “But what is important to note is that seven in 10 of those clients who left their financial advisors said there was something that could have been done to keep them as a client.”

The most effective strategies for keeping your clients loyal, says Joanne Ferguson, president of Advisor Pathways in Toronto, are centered on building strong relationships based on trust and effective communication.

Littlechild and Ferguson offer the following advice to help you keep your clients from shopping around for another advisor:

1. Create realistic expectations
You can’t control how the markets will move in the weeks, months or years ahead. But you can instill reasonable performance expectations in your clients’ minds.

Make sure your clients understand that markets are bound to fluctuate, and that your advice takes those expected fluctuations into account.

Have an in-depth discussion about each client’s financial goals and find out his or her risk-tolerance threshold. This information will help you choose investment products that meet your client’s specific needs.

Says Ferguson: “Avoid the one-size-fits-all approach at all costs.”

2. Create a long-term plan
Offer financial planning in your service menu. Creating long-term plans for clients is an effective way to increase client loyalty.

Clients are less likely to leave for another advisor, Ferguson says, if you have established some long-term bonds with them and their families.

“Listen carefully and focus on the plan,” Ferguson says. “That’s the key to long-term success.”

Take a few minutes during each client meeting, she suggests, to revisit the client’s plan and make sure everything is on track.

3. Educate your clients
An ability to explain challenging financial concepts clearly and in simple language for your clients is a significant advantage, Littlechild says.

For example, many advisors can explain the complexities of the projected market trajectory of Canadian treasury bills. But can you explain that concept in a way that can be understood by the average client — and make it relevant to that client’s financial goals?

You can set yourself apart by being able to explain financial concepts to clients in a jargon-free way that resonates with them.

4. Enhance your client experience
Give your practice added touches that make clients feel special. The “extras” you choose will depend on what you feel is most relevant for your clients.

You might, for example, offer gourmet coffee and tea in your office. Or, perhaps more comfortable chairs for lengthy client meetings. You might choose to give your clients tickets to sporting and cultural events or hold frequent client-appreciation events.

Whatever you choose, Ferguson says, the objective should be to make your clients feel valued.

“Clients leave because they don’t feel valued,” Ferguson says, “You must honour your relationship with each and every client.”

This is the final instalment in a three-part series on retaining clients.