Are you about to be Replaced?

By Bryce Sanders

Your worst fears are coming true.  While you are busy prospecting other producers’ clients, hoping to find people being underserved, other producers are having the same conversations with your clients. Other people may be sowing seeds of doubt in your clients’ minds. “Are you an important client to your producer? How do you know?”

What can you do to protect your own clientele while seeking to expand the business? What are the warning signs that someone is considering leaving for another producer?

Why do clients leave?

Interviews with high-net-worth individuals as well as successful producers and advisors provide clues.  Investment and product performance can be a major reason. Although you probably measure performance vs. benchmark indices for asset classes, a competing producer or advisor may focus on the size of the loss. You can’t control the market or its effects on annuities and other insurance products.

Perception of value, or “I’m losing money and paying for the privilege”:

It’s easy for clients to undervalue expertise when things look bad. Sometimes short-term memories forget the years they did well. You can’t do much to control this either.

Decrease in the level of contact and service is often a byproduct of a difficult market. “The client’s portfolio is down. They blame me. I just won’t call!” When contact is dropped off, the client feels underappreciated. This is a problem you can control and influence.

Perception of strategy is a big issue in a volatile market. Does your client think you know what you are doing? If you don’t take a leadership role in conversations and point to the outcome you expect in the future (with certain assumptions spelled out), they may assume you are drifting. Why are they paying good money for you to drift? You can control this, too.

The annual review of your client’s portfolio is often a casualty of a volatile market. But this type of service shows clients you are attentive. This also can be controlled.

 What are the early warning signs someone may leave?

You’ve experienced the client who doesn’t return phone calls or e-mails.  How can you help a person who won’t talk to you? Then there’s the client who complains about almost everything.  Next we have the client who ignores advice. They are saying they don’t trust you or think you know what you’re doing. If the client (especially an older one) introduces a new person into the relationship who “needs to approve all changes going forward,” the alarm bells should be going off.

 After drinks were ordered and dinner choices made, he looked them in the eyes and said: “Things haven’t been good lately.”

What can you do to address the situation before it’s too late?

Let’s look at four scenarios that will help prevent this from happening to you:

1. The suspicious client

“Oh, it’s you. I only hear from you when you want me to buy something.  I guess it must be the end of the sales month. OK, what is it this time?” 

The client feels used. Your attention to them is interpreted as making money at their expense. When faced with the same problem, an advisor in New York changed the focus of communication.  Start clipping articles about products your clients own and send the original clippings (NOT copies or e-mail links).  Include a handwritten note such as: “Thought you might find this interesting.”  (Financial advisors should check with compliance for approval on wording.)  This conveys to clients that of all the people you could send this to, you chose them. Send your newsletter.  Include them on your seminar invitation list. Send them reports your companies issue on the state of the economy. Educational material is helpful too. Call to discuss news stories and the possible effects on their security. Review their performance periodically.

Now you have broadened communication across several channels and minimized the percentage of contacts connected to “transactions.”

2. The hostile spouse:

“Oh, it’s you. That broker he’s so chummy with. Obviously you don’t want to talk to me. I’ll get him for you …” 

You’ve determined which partner in the relationship is the decision-maker. Being efficient with your time, you focus attention on that spouse. The other spouse feels like a nonentity. They have enormous power behind the scenes and can badger the decision-maker into throwing you overboard.

An investment advisor in Texas found himself in that same situation. He called when he knew he would get the hostile spouse on the phone, perhaps when the decision-maker was playing golf. He started by saying: “We’ve never met and we need to meet. Maybe I’m not the right advisor for you.” He scheduled a meeting, with both parties in attendance.

At the meeting the advisor was completely prepared to confirm their investment objectives, review the structure of the portfolio and report on performance.  He concentrated almost all his attention on the hostile spouse very respectfully.  At the end of the meeting, he explained: “When investing, the decisions you make should be based on knowledge, not emotions. I’ll give you enough information to make knowledgeable decisions.” He established his competency and conveyed the message that the spouse was an important partner in the relationship.

3. The ticking time bomb

No one has said anything. Maybe some products haven’t worked out.  Maybe the simplest paperwork problems don’t get solved. Their phone messages get lost. Almost everything that can go wrong does. The client is coolly polite.

A producer in Massachusetts, when faced with this same situation, invited the couple to a nice restaurant for dinner. After drinks were ordered and dinner choices made, he looked the couple in the eyes and said, “Things haven’t been good lately.”

In such conversations, the client usually comes back with a litany of complaints.  The intensity, anger and vehemence builds. The wise producer treads carefully, not arguing, but listening and drawing the client out. The producer doesn’t accept blame for things he didn’t do, but he doesn’t offer counterarguments either. It’s important for the client to realize the producer is listening while being berated. Once the wave of anger subsides the producer makes a few points and calmly gives reasons for the recommendations they made. Next, the producer looks the client in the eyes and says, “What can we do to move forward?” and then stops talking. It’s very difficult for a client to say, “I’m leaving” or “We can’t move forward.”

4. The party’s over

It’s too late. They already left. And they were great clients, too. You really liked them!  Another producer in New York City has faced that situation. She called the client after several months and explained: “I realize you had your reasons for leaving. I really enjoyed working with you. You were a very important client to me. Has everything worked out the way you hoped?”

This brings us back to the beginning of the article. When being prospected by a competitor, sometimes clients feel that “The grass is greener on the other side.” Later they learn it isn’t. Pride often keeps them from coming back. When the New York producer called, she was meeting the other person halfway. It gives them an opportunity to say, “It hasn’t worked out. Maybe we should get together and talk.”

Bryce Sanders is president of Perceptive Business Solutions Inc., which provides high-networth client acquisition training for the financial services industry.  He presented at MDRT in 2008. His book, “Captivating the Wealthy Investor,” is available on You may leave feedback for him at


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