Pitfalls that make you lose clients

12 November 2018Myra Knoesen

Financial advisers spend a lot of time and effort in finding good clients and prospects who will generate a long-term stream of revenue for their business.

While there are countless tips and expert advice on how to attract clients, much less has been said about how not to lose them. Keeping clients for life can be every bit as challenging as finding them. 

Navigating this difficult industry

Justin Kuepper, a Personal Retirement Accounts Manager, who independently builds and manages financial portals, says financial advisers operate in a notoriously difficult industry. 

“The most successful financial advisers know that open and professional communication is key, but amateurs can quickly fall into common traps that lead to client attrition,” he continues. 

Kuepper says it is crucial that advisers are able to spot and avoid common pitfalls, otherwise they will lose clients. Here is a list Kuepper believes is how financial advisers lose clients.

Pitfall number one
Kuepper says the first pitfall to avoid is confusing the client.

“Financial terms like alpha and beta should be ingrained in the minds of every financial adviser, but most clients have not read finance books or studied for the CFP exam. Rather than providing advice in complex financial terms that clients do not understand, try to convey value based on benefits and attributes that the client understands.” he says.

Pitfall number two
Kuepper says the second pitfall to avoid is being unclear about the separation between friends and clients.

“Relationships can cause issues down the road; it may be difficult to manage a friend's or family member's nest egg and meet expectations. This can be avoided by maintaining a clear separation of personal and professional relationships. It is important to respect boundaries and avoid delving into personal issues (other than finances, of course),” Kuepper adds.

Pitfall number three
Kuepper says the third pitfall to avoid is making the purchase hard to sell.

“In most cases, buying a car is high-pressure and an unreasonably long process that involves a hard sell early on, making customers uncomfortable and discouraged. Financial advisers make these same mistakes when making a hard sell early on by pitching products to clients during their very first meeting. In general, people respond better to being pulled into an opportunity rather than being pushed into it. Accomplish this by using a first meeting to establish a relationship; and then you can use the second meeting to discuss products,” Kuepper continues.

Pitfall number four
Kuepper says the fourth pitfall to avoid is to be a ‘know it all’.

“You may think you are always right but there are situations that call for notproviding the "right" answer. Financial advisers that practice self-awareness tend to experience the greatest success in their practices. By being aware of their performance-specific weaknesses, they can improve upon their skills over time and avoid making costly mistakes. Advisers should focus on listening (instead of talking), remaining neutral and sticking to proven principles,” Kuepper says.

Kuepper concludes by saying the bottom line is that financial advisers operate in a difficult industry where it is easy to make mistakes that can lead to client attrition. “By avoiding these five common missteps, advisers are more likely to develop a successful practice with a loyal client base.”

Bookmark and Share


Quick Polls


Which contestant of The Insurance Apprentice 2019 do you believe has the reinstatement card?


Colin Lunsky
Ditebogo Mokgalabone
Gillian Riley
Jake Pennacchini
Kishan Vanmali
Mitesh Lakha
Palesa Mochane
Reese Aron
AE fanews magazine
FAnews February 2019Get the latest issue of FAnews

This month's headlines

CPD versus Product Training: What's the difference?
Fit & Proper: the early warning requirement
Insurers take on PPRs
Withdrawal strategy... the pensioner's puzzel
Growing up with the right advice
Picking the brains of Millenials
Subscribe now