Though there are a number of habits that can cause harm to an adviser’s business, as noted by Adviser Ratings, maintaining communication with clients outside of annual meets can be a challenge, largely due to a chronic lack of time, which can cause significant harm to adviser-client relationships.
According to Adviser Ratings, those that engage in regular, meaningful conversations throughout the year achieve significantly higher client retention and referral rates while also fostering deeper connections with their clients.
“Modern clients expect more than just annual reviews. They want to feel connected to their financial journey and understand how market changes or life events might affect their plans. Practices that fail to provide this ongoing engagement risk client attrition and missed opportunities for deepening relationships,” Adviser Ratings said.
While all advisers can fall afoul of this, the firm suggested that poor communication is particularly evident among risk advisers, resulting in higher lapse rates.
In order to address this, Adviser Ratings recommended utilising health and wellness programs to enhance client engagement and provide a pathway for regular communication.
Meanwhile, when it comes to taking on new clients, the firm warned advisers against accepting all potential clients as this can often lead to lower profitability and inefficiency barriers; however, 26 per cent of firms are still engaging in this practice.
Although it is likely tempting, particularly for less established businesses, Adviser Ratings said that those who lack a clear target market often struggle to develop specialised expertise, “leading to diluted service offerings and increased operational complexity”.
While advisers are regularly reminded of the importance of fostering positive relationships with their clients, Adviser Ratings found that practices that fail to do the same with business development managers and support staff often face challenges as a result.
According to the firm, poor relationships with platform and product providers and their staff can lead to slower processing times, higher error rates, reduced client satisfaction and limited access to new opportunities, in addition to hindering practice efficiency.
With technology advancing fast and financial advice becoming increasingly complex, Adviser Ratings said that “no practice can operate in isolation”.
“Practices that treat these relationships as purely transactional often find themselves at a disadvantage when they need support or access to new opportunities,” the firm added.
