Close to Half of FAs Are Worried About Client Defections in 2020

By Alex Padalka July 30, 2020

Almost half of financial advisors are concerned their clients are going to leave them this year, but one marketing firm says the key to retaining and attracting clients is digital engagement. 

“Digitally-enabled advisors” — what financial advisor marketing platform AdvisorStream defines as those who “embrace” digital marketing and rely on a mix of communications methods including social media, email and newsletters — saw an open rate of digital communications 20% higher than the industry average, the company found in a survey.

Such advisors saw a 40% jump in client lead growth compared to what AdvisorStream calls the “traditional advisor,” defined as one who is “unfamiliar with digital marketing and doesn’t use it in their practice.” 

“Traditional” advisors are apparently running into difficulties, according to the survey findings. Thirty-seven percent of such advisors are worried they’ll lose clients because of a lack of communication, according to the survey, which polled close to 1,000 financial advisors in the U.S. and Canada.

In addition, 52% percent of “traditional” advisors are worried about clients dropping them during the pandemic, AdvisorStream says.

However, it’s not just the traditional advisors who are concerned: 48% of all advisors are worried about client defections this year, according to the survey. 

Over a third of respondents who are very concerned about shedding clients say they’re finding it hard to maintain regular contact, AdvisorStream says. And close to 75% of all advisors say they’re frustrated about generating new leads and standing out from the competition, according to the survey.

"Our comprehensive research shows that during a crisis, you can grow as a financial services company if you have and use digital tools properly,” Kevin Mulhern, CEO and co-founder of AdvisorStream, says in a statement.

“The opportunity among advisors to retain and grow clients at this point in critical times is at an all-time high, and digital solutions figure in as the number one area for advisors to focus on in 2020.”

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