Opinion - How to get clients and keep clients

Opinion - How to get clients and keep clients

Opinion - How to get clients and keep clients The following article was written by Sean Harrell, partner and senior advisor at Howe Harrell & Associates.

With so much controversy in our industry today on topics such as The Great Fee Debate (CRM2), defining the role of an advisor, conflicting advice based on commissions, the robo-advisor, etc., I think that a conversation on the fees associated with financial products along with advisory services is the key to ensuring clients are able to attach a value to their advisor, whether it be a fee for a service advisor, a commissioned advisor or a robo-advisor.

After 17 years in the industry it has finally (sometimes I’m a slow learner) come to my attention in the past few years that the majority of the problems I hear about each day could be 100 per cent avoided if the advisor had simply communicated to the client what was taking place within their financial plan (or their investment account, or their insurance policy). I think the reason I didn’t notice these issues sooner is because I believe the answer to these issues is ridiculously simple: educating the client. 

With the emergence of CRM2 and, more recently, the Cummings report, a huge debate has been started arguing how clients have been and will continue to be affected by the fees associated with the financial products they have purchased. Why is this coming to light just now?  Good advisors have been discussing fees with their clients and prospects for years. From a client perspective, I don’t understand how you can buy something without asking what the price is. And from an advisor perspective, if the client doesn’t ask about the fees associated with engaging said advisor it is the advisors job to explain them. It just makes good business sense. We know that the fee discussion is going to come up at some point in the future and if we shock the client with our costs it is a pretty sure bet that we will be losing the client. I don’t know about other advisors but I need a certain amount of revenue to keep my doors open and I have found that keeping clients is far easier than trying to find new ones.

Regardless of if an account is fee for service or has embedded fees, most of our client conversations start like this: 

Me: “How much are you paying your current advisor? What services are you receiving for that cost?” 

Prospective client: “I have no idea how much I am paying but I am receiving this, this and this.” 

Maybe the client is getting a great deal and they are working with a great advisor, maybe they aren’t. This conversation opens the door for us to explain our value proposition, explain what we can do for them that their current advisor isn’t and hopefully obtain a new client in the process. This is how we make our living.
Clients want and need to be educated on this topic. I’ve never had a client say to me that they don’t want to know how much they are paying for my services. I assume that there are many good advisors out there that feel the same as me - we just can’t fathom the idea of working with a client without them knowing how much they are paying for our expertise. 

Do you have any reaction to Sean’s views? Leave a comment below with your thoughts.

The views expressed in this article are those of Sean Harrell, partner and senior advisor at Howe Harrell & Associates. They do not necessarily reflect those of Howe Harrell & Associates or of Wealth Professional.