client complaints tablet

Two recent research studies upended much of the conventional wisdom about why financial advisors lose clients. One was an internal study by a large investment firm; the other was research conducted by the consulting firm Accenture PLC.

The internal study from the investment firm probed the immediate reasons why that firm’s advisors lost clients. Historically, conventional wisdom among advisors was that there are two key triggers for clients to leave.

The first trigger is unhappiness with portfolio performance, often related to unrealistic expectations. The second is changes in circumstances: in some cases, clients passed away; in other cases, clients moved, due to either work transfers or changing residences after retiring.

In other words, most advisors felt there was nothing they could do about losing those clients.

The Accenture study, entitled Wealth in the Digital Age, acknowledges performance and changes in circumstances as reasons for defection, but points to three other reasons clients leave:

Value. Clients feel they’re not getting good value for the fees they pay and look for lower-cost alternatives.

Attention. Clients aren’t getting enough attention from their advisor on issues such as preparation of a financial plan or resolving service issues.

Relationship. Clients are unhappy with their relationship with their advisor.

Providing value

The Accenture study, conducted among a broad range of investors in the U.S. and Canada, amplified some of these findings. When investors were asked about the value provided by their advisor, most of the wealthiest investors said they question the value they receive from their advisor.

In response to the statement “My advisor does not provide sufficient value”: 32% of mass-market clients ($100,000-$250,000 in investible assets) agreed; 37% of mass-affluent clients ($250,000-$650,000) agreed; 43% of emerging wealthy clients ($650,000-$1.5 million) agreed; 56% of high net-worth clients ($1.5 million-$10 million) agreed; and 72% of ultra-high net-worth clients ($10 million-plus) agreed.

When investors were asked about their attitude toward their advisor, slightly fewer than 30% of clients said they don’t feel important enough to their advisor, don’t feel that they are getting enough attention or feel that their advisor’s service is too expensive.

These findings should be a wake-up call, especially if you target clients with $1 million or more in investible assets. (In 2019, I’ll be exploring how you can address some of these satisfaction gaps.) Many of the causes of dissatisfaction are complex and challenging to address and often beyond your control. If the causes of your clients’ unhappiness were easy to fix, they would’ve been resolved and every client would be 100% satisfied.

Here’s the good news: there’s one cause of client unhappiness that’s entirely within your control. All it takes is a 10-step checklist whenever a client reports a service issue.

Managing moments of truth

The concept of a “moment of truth” originates from work by Procter & Gamble Co. (P&G), widely considered to be the consumer goods firm that, more than any other, looks at problems from the customer’s point of view. That focus, along with a strong commitment to research and development, has led to 23 brands with global sales of more than $1 billion, including such household names as Pampers, Febreze and Tide.

P&G’s marketers analyzed the customer experience and identified two moments of truth. The first comes at the point of purchase, when consumers decide whether the value justifies the price. But the real moment of truth comes when consumers use a product, especially if they had to deal with an unusually messy situation.

Jan Carlzon, a business leader who took over as president of money-losing Sweden-based Scandinavian Airlines System AB in 1981, brought this same mindset to bear. In an early employee workshop, Carlzon said, “We have 50,000 moments of truth every day” – referring to every contact with a passenger.

There also are many moments of truth for advisors. One of the most important comes when a client calls with a service issue: a statement has been mailed to the wrong address; a cheque was deposited into the wrong account; a request to change beneficiaries was not fulfilled.

How you and your team respond to those moments of truth may determine whether your clients feel important and whether they’re getting the attention they deserve. If you and your team don’t handle these issues well, trivial as they may seem, your client relationships may be undermined.

On the other hand, get resolution to day-to-day issues such as these right, and you could strengthen relationships. Research shows that when customers feel listened to and their issues are addressed, they end up feeling better about a company than they would if the problem hadn’t happened.

That’s why one American advisor I talked to recently – who has $5 billion in client assets under administration – starts his daily team huddles with a list of unresolved client complaints. Until the team figures out how to address an issue, they don’t move on to the next issue.

A 10-step complaints checklist

Physician Atul Gawande describes how the use of checklists has reduced plane crashes and improved outcomes from surgery in his book The Checklist Manifesto. If you’re serious about getting moments of truth right when clients call with issues, consider implementing this 10-step process:

Step 1: Listen

Whether clients call with a problem or raise an issue in a meeting, your first priority is to focus all your attention on listening to what they have to say. Suspend any irritation you may experience and take detailed notes of what clients are telling you. Look for hidden meaning that can be indicated by their tone. If you’re meeting in person, look for body language and facial expression.

Step 2: First apology

As soon as the client has finished describing his or her problem, deliver a sincere apology: “I’m terribly sorry to hear that you’ve run into this problem. There’s no excuse for this having happened.”

Chances are that the screw-up arose from a glitch in your back office and that the error wasn’t your fault. That’s not important. What’s important is that the client feels someone is taking responsibility.

Step 3: Clarify

After apologizing, ask questions to get as much background and detail as possible. The simple words “Tell me more about that” can yield important additional information that will allow you to fix the problem. Just as important, asking followup questions lets clients know that you’re listening.

Step 4: Agree to the next steps

Once you have all the information you need, outline what you’ll do next and let the client know when you’ll get back to him or her. Even if you think you can fix the problem on the spot, take the time to ensure that the problem gets fixed right the first time. And when suggesting when you’ll respond with a solution, be sure to build in a buffer so that you know that you’ll be able to meet or, ideally, exceed the deadline for a response.

Step 5: Second apology

Before hanging up or ending your face-to-face meeting, apologize a second time: “Once again, I’m terribly sorry about the inconvenience you’ve run into here. We do our very best to eliminate mistakes, but, unfortunately, as hard as we try, mistakes do creep in occasionally.”

You may feel that a second apology is unnecessary – after all, you already said you’re sorry. The truth is that just because you said the words, that doesn’t mean that the client heard them.

To ensure clients believe they’re being listened to and that you’re truly sorry, make a point of apologizing again at the end of this first conversation.

Step 6: Get buy-in on the fix

After you’ve resolved the problem, get back to the client with the solution. Explain what happened and what you’ve done to fix the issue. At that point, ask two key questions:

“Does this fully address your concern?”

“Is there anything I can help you with today?”

Even if the issue is trivial, clients, in some cases, may be questioning whether they’re important enough to you and have enough of your attention. This is your chance to reassure them.

Step 7: Follow up

We’ve all run into situations in which we were told that a problem had been fixed, only to discover that not only has the issue not been resolved, but a new mistake has been made. You need to follow up to ensure that whatever was supposed to happen to fix the problem has happened.

Step 8: Check back

At this point, a quick call or email to your client makes sense to ensure the mistake has been corrected from his or her point of view. Just because you thought the mistake was corrected, that doesn’t mean that your client is satisfied.

Step 9: Third apology

In that followup call or email, be sure to apologize one more time. Remember, your client has been inconvenienced and you want to ensure that the client knows you’re sorry.

Step 10: Monitor interactions

Finally, make an extra effort to track interactions regarding that client over the next while. We’ve all had the experience in which problems are contagious and the same client seems to run into issue after issue. Apologizing will be of little benefit if a client runs into persistent issues.

You may look at this list and say that it’s overkill in response to minor issues. But remember: when clients run into a problem, this is a moment of truth: they will evaluate their relationship with you. That moment of truth is a test.

Put this 10-step checklist into place and you’ll pass that test with flying colours.

Dan Richards is CEO of Clientinsights ( For more of Dan’s columns and informative videos, visit