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The era of the transactional advisor is behind us. But how can you differentiate your practice in a crowded field and guard against client attrition?

Clients don't define success by merely the growth of their portfolios. Instead, they view investing in terms of life goals, such as saving for university and retirement independence, and they depend on you to be a trustworthy, attentive guide on their path.

The key to differentiating your practice in this landscape may be positioning yourself at the centre of clients' financial lives, taking the time to gain a 360° view of their financial relationships and serving as a hub for an array of value-added services.

Here are tips for putting this philosophy into practice:

Figure 1

Research shows that high-net-worth clients end their advisor relationships for a multitude of reasons.

Strikingly, beyond a client’s death, most reasons are factors that you can directly influence through proactive relationship management. The most effective services you provide may draw on your people skills, not your investment skills. And even when the end of an advisory relationship is the death of a client, consider this: What actions have you taken to ensure that your client's heirs will continue to turn to you for advice?

Invest in your client relationships

No one enjoys hearing a sales pitch. Research suggests that the most successful, enduring practices tend to be built on specific, genuine connections, setting expectations that reflect clients' personal goals, not performance relative to the market. Advisors who play the role of counsellor, confidant and even detective may gain the opportunity to differentiate their practices. By listening closely for cues, you can help match clients with the appropriate services.

Use estate planning as a bridge

Estate planning can be vital to developing enduring relationships with your clients, their partners and the next generation.

Whether you offer specialized services through in-house consultants or provide referrals, use

estate planning to learn more about your clients. Beyond the opportunity to help clients plan for the future and proactively address tax liability, you may gain the chance to make inroads with clients' families and build bonds of trust.

Research shows that 67% of couples want to make financial decisions jointly.* So, ask clients if they're comfortable that spouses or heirs could handle their estates. Offer to meet with family members. Providing financial literacy and investment guidance to heirs can reassure your clients and build stronger connections.

Reach into the complexity

You know that your clients are more complicated than their investments. Your relationship-building efforts need to reflect this real-world complexity.

While understanding investment goals is important, don't hesitate to ask clients about other concerns and pressures that inform their lives. You may not have an investment-related solution to offer. Yet you may find that your investment of time and attention will pay off in deeper, more cohesive relationships and referrals.


Important information:
This material is for informational purposes only. This material is not intended to be relied upon as research, investment, or tax advice and is not an implied or express recommendation, offer or solicitation to buy or sell any security or to adopt any particular investment or portfolio strategy. Any views and opinions expressed do not take into account the particular investment objectives, needs, restrictions and circumstances of a specific investor and, thus, should not be used as the basis of any specific investment recommendation.

While this information has been compiled from sources believed to be reliable, Vanguard Investments Canada Inc. does not guarantee the accuracy, completeness, timeliness or reliability of this information or any results from its use.

Information, figures and charts are summarized for illustrative purposes only and are subject to change without notice. All investments, including those that seek to track indexes, are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market.


Category: Advisor

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