If you have been procrastinating in responding to your client’s emails or calls, you may be at a risk of losing him. In fact, a popular US research paper says, “Communication is the key to retain clients.”
A recent survey conducted by CFA Institute shows that retail investors leave their advisors due to lack of communication and responsiveness.
The CFA Institute study titled ‘From Trust to Loyalty: A Global Survey of What Investors Want’ revealed that 38% of retail investors would sack their advisors if their advisors did not respond to their email or call quickly.
CFA Institute has conducted this survey with 3,312 retail investors across four continents - North America, Europe, Asia (including India) and Australia.
However, the top reason why clients leave their advisor is underperformance of their financial portfolio. The survey found that 53% of retail investors say that they would not like to continue with their advisors if their recommended funds underperform.
Increase in fee structure is another reason for clients’ attrition. The survey says that 46% of investors will switch their advisors if they hike fees.
Another key reason why investors sack their advisors is data breach. Over 43% of retail investors would sack their advisors if they compromise their confidential information, shows the survey results. “Clearly, data breaches across industries from health care to retail have shaken consumer confidence in financial services as well”, said the report.
In fact, the report recommends, “Investment firms must employ measures to ensure that only they and their staff have access to investors’ personal and financial information.”
Source: CFA Study
