If you’re a financial advisor pay attention. A new report from Spectrum Group and Vanguard was released that has found that response time is absolutely crucial in maintaining your client base, especially your wealthy clients. Oddly enough, affluent investors care more about having an advisor that provides more personal attention and care over to them than actually picking the right stock.
In fact, the top four reasons as to why wealthy investors dump their advisors all have to do with communication. The first reason in the study was not returning phone calls in a timely manner. The second reason was not providing me with good ideas and advice (a stretch, but still communication). The third – not being proactive and contacting me and the fourth was not returning e-mails in a timely manner. Not until number five did we see long term (more than one year) losses in my portfolio.
Whether or not the majority of investors fail to deliver promised returns higher than their respective benchmarks is questionable. Most likely, the answer to that question is they haven’t especially when talking about domestic equity categories. Ultimately, throughout the economic top spin we’ve seen over the past 5-8 years it’s highly unlikely to deliver great results. With that said, you can mitigate the loss of wealthy clients by taking a look at the survey by Vanguard. Many times, it’s not about results when it comes to maintaining your client portfolio.
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