Why Financial Advisors Should Use Email and Social Media for Client Retention - OutboundEngine
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Why Financial Advisors Should Use Email and Social Media for Client Retention

It’s a moment every financial advisor dreads. You fire up your computer, log in to your brokerage account and discover something’s wrong.

Why is there a million dollars missing?!

As you frantically scan through accounts, it suddenly hits you — you’ve lost a client.

Why Client Retention Matters for Financial Advisors

Losing an existing client stings a lot more than failing to close a new client, and for good reason — an existing client with over $1 million under management could generate $141,000 or more in fee revenue over the next 10 years. That’s revenue you already had locked down, suddenly gone. That hurts.

To make matters worse, you’ve lost a potential source of referrals who might have helped you win new clients in the future. And you still have to replace the lost client and their assets just to get back to your high water mark.

It’s hard to build a robust business if you’re constantly scrambling to replace clients, and it’s certainly not good for your sanity to see clients leaving. On the bright side, Charles Schwab’s 2015 RIA Benchmarking Study showed a median 97 percent client retention rate year-over-year for participating RIAs.

Even with the odds in your favor, the reality is that very few financial advisors are batting 1,000 when it comes to client retention. It’s also worth noting that over half of the firms that participated in the Charles Schwab study were in their third decade of business, so results may vary based on experience.

But whether you’re a veteran of the financial industry or a young up-and-comer, the question is the same: Why do clients leave their advisors in the first place?

Why Clients Leave Their Financial Advisors

There are a variety of reasons why a client may decide to terminate the relationship and move their funds elsewhere. Some of those reasons have nothing to do with your performance or your relationship.

For example, a client may relocate and prefer to deal with a more local advisor. The adult children of an older client may decide to move the account to their preferred financial advisor. Or if a client passes away, his or her estate may be distributed to the beneficiaries at their chosen financial institutions.

For the most part, there is little you can do to stop this type of client attrition. But these aren’t the only reasons clients jump ship.

According to Vanguard and Spectrum Group, the top four reasons that mass affluent, millionaire and ultra-high-net-worth (UHNW) clients give for switching financial advisors are all communication-related:

  1. Not returning phone calls in a timely manner
  2. Not providing good ideas and advice
  3. Not being proactive in making contact
  4. Not returning emails in a timely manner

Perhaps the most eye-opening takeaway from this study was that clients ranked communication issues well above both long- and short-term portfolio losses. Think about that for a moment. Your clients are more comfortable with losing money than they are with a lack of communication.

Luckily, in the digital age, some thoughtful planning makes problems with lack of communication entirely avoidable.

How Email and Social Media Can Improve Communication

According to Spectrem Group, 20 percent of millionaire investors prefer email over telephone communications.

A joint study by LinkedIn and Cogent Research found that 87 percent of mass affluent investors use social media, with 44 percent engaging with financial institutions on social media, and 34 percent engaging with the content shared by financial institutions.

In fact, 36 percent of mass affluent financial investors use social media for the discovery or consideration of financial companies, products, policies or accounts, with 63 percent taking action as a result of what they learned. Investors also considered improved customer service, timely updates, and relevant content to be the most valuable outcomes of a company’s social media presence.

The takeaway is clear. If a lack of communication is the problem, content marketing via email and social media provides a solution.

Consider the benefits. Clients get the attention they want and deserve, which makes them less likely to switch financial advisors. But they also get the added value of great content, which helps nurture your relationship and establish you as an industry expert and go-to source of information. As a result, you remain top of mind for repeat and referral business.


Marketing via email and social media channels can be a great way to maintain existing client relationships and expand your reach to generate new business. But if you’re new to these platforms, or just don’t have the time necessary to properly execute your content marketing strategy, don’t hesitate to ask for help. Our team of marketing experts are always here to handle it for you.


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Erin Myers