To err is human, but when you’re trying to build a thriving advisory business, you can’t afford any missteps. Even a seemingly small mistake could cost you clients, revenue and long-term growth. Once you know the most common financial advisor mistakes, you can avoid them. Not to mention, avoid endangering your growing business.

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Avoiding Mistakes Can Lead to Happier Clients, Better Brand Reputation

Clients may switch advisors for a variety of reasons. For example, their personality may not mesh well with their advisor’s. Or they’ve simply outgrown the range of services their advisor offers.

Those are the types of things that may be beyond your control. But there are other instances that are within your control. Such as clients who choose to leave their advisor because of an avoidable or correctable mistake. If that happens often enough, it could hinder your ability to realize your business objectives.

When you understand what turns clients off, you have an advantage. Satisfied clients are more likely to remain with you for the long haul, as well as refer their friends and family to you.

Building a reputation for flawless service, meanwhile, can be a force that brings new leads your way. Investors who are searching for an advisor to work with may be more inclined to consider your firm if your brand is synonymous with outstanding service and happy clients.

10 Financial Advisor Mistakes to Avoid

Every advisor’s experience is different, and it’s possible that you could be making mistakes without realizing it. If you’re ready to nurture stronger client relationships, here are some of the most important errors to avoid.

Mistake #1: You’re Too Technical

When you’re meeting with a new client (or an existing one), it’s important to remember what your respective playing fields look like. You may be at ease discussing financial topics in industry-speak, but if they don’t have the same vocabulary, what you’re saying may go right over their heads.

The solution? Ditch the jargon and use a conversational, friendly approach to explain financial concepts. And give your clients plenty of room to ask for clarification on terms they don’t understand.

Mistake #2: You Tell, But Don’t Show

If you’ve studied behavioral finance, you probably know that people have different learning styles. This can affect their decision-making and perspective on money. While some of your clients may be able to absorb what you’re saying, others may need a visual aid to fully grasp the conversation.

Portfolio visualizer tools can help solve this problem. With visualizer tools, you can create a visual representation of investment outcomes in chart or graph form. This gives clients something tangible they can use in their decision-making.

Mistake #3: You Don’t Foster Trust

Trust is arguably one of the most crucial elements in the client-advisor relationship. If your clients don’t view you as being trustworthy or reliable, why should they take your advice? Better still, why should they even be your clients?

Building trust starts before someone becomes your client. It means having a professional financial advisor website that highlights your expertise and a social media presence that encourages advisor-prospect interaction. Once they become your client, trust-building continues. Only now, it involves demonstrating value and positioning yourself as a partner in helping the client reach their goals.

Mistake #4: Your Communication Is Lacking

Nothing is more frustrating to a client than trying to contact an advisor who doesn’t return phone calls or emails, except maybe an advisor who does respond but never really seems to listen.

Put yourself in your client’s shoes, and ask yourself if the way you communicate leaves something to be desired. If it does, consider what you can do to improve it.

For example, do you have a standard communication policy in place that spells out a turn-around window for returning emails or calls? Do you practice active listening with clients so that they feel both heard and understood?

Addressing communication can go a long way toward correcting the third mistake on this list, a lack of trust.

Mistake #5: You Set Unrealistic Goals

An advisor uses portfolio visualizer tools to explain their strategy to their client.

Successful financial advisors understand the importance of setting specific, realistic and actionable goals. Trying to grow without goals is like hiking into the wilderness without a compass or a map.

Not setting goals is a mistake, but setting goals that are unrealistic can be just as damaging. Unrealistic goals are a form of self-sabotage because when you don’t reach them, you get frustrated. Instead of scaling goals down, you aim even higher, only to set yourself up for disappointment again.

Benchmarking can help you set goals that are realistic for where you are now and how much growth you’d like to achieve. Digging into key performance indicators (KPI) and analyzing how you compare to your competitors can help you set workable, achievable goals going forward.

Mistake #6: You Don’t Follow Up

Making time to follow up with prospects and clients is a simple, yet powerful, way to grow your business. You might connect with a prospect and exchange a few emails, but if you fail to consistently follow up, you could miss an opportunity to convert them to a client.

It’s just as important to follow up with your existing clients when there’s a significant change to their financial plan or it’s been a while since you’ve heard from them. A brief email to say hello and ask if they’d like to schedule a chat could lead to a conversation about other products or services they may be looking for to complete their financial plan.

Mistake #7: You Don’t Show Appreciation

Your clients want to feel that they have value to you, beyond the assets under management they bring to the table. Showing appreciation, whether it’s with a client event or a personalized greeting card, is a terrific way to remind them that they matter to you.

And there’s a positive side effect that can occur when you show appreciation. Your clients may show their appreciation back by referring friends and family to you.

Mistake #8: You Don’t Have a Digital Marketing Plan

Digital marketing is front and center for advisors who want to be visible online. A solid digital marketing plan may include search engine optimization (SEO), a professional website, social media, digital ads and email.

Collaborations can also play a part if you’re increasing your brand visibility through partnerships with other advisors or financial influencers. If you don’t have a digital marketing plan, you could be wasting your time and marketing budget on things that won’t drive traffic to your business.

Look at your current marketing plan. What’s lacking? Consider how you might be able to expand your digital footprint to grab prospects’ attention.

Mistake #9: You Don’t Ask for Feedback

When was the last time you asked your clients to share feedback about their experience working with you? If the answer is never, then it may be time to pop the question.

Asking clients for feedback is a chance to learn what they love about your business, and where you might be falling short. An anonymous client experience survey is an uncomplicated way to collect responses.

Once you’ve gotten feedback, take time to go through it and look for patterns in client responses. If the majority of your clients complain that it takes too long for you to return phone calls, for instance, that’s a big hint that you need to focus on better communication.

Mistake #10: You Try to Do It All Yourself

You want to grow your business, but to do that, you need to understand your capabilities and limitations. You can’t be everywhere at once, and trying to be is a mistake if it leaves you spread thin and your clients questioning the service you’re providing.

There’s a better way and it involves collaboration, partnerships and utilizing tech tools that free up time so you can focus on other tasks. For example, if marketing is a major pain point you might consider working with a marketing platform that helps you connect with leads.

Just remember that while using tech can save time and money, your clients still want a human touch. If you have a task that you can’t automate, consider delegating it to another member of your team instead.

Bottom Line

A financial advisor following up with a client, avoiding a common financial advisor mistake.

These financial advisor mistakes can be an obstacle to growth, but they don’t have to be. And if you’re guilty of making any of these mistakes, look at what you can learn from the situation and commit to avoiding the same bumps in the road ahead.

Tips for Growing Your Advisory Business

Digital marketing can take time to master, and if you’re not an SEO expert or don’t know much about email marketing, it’s easy to get frustrated by your progress (or lack of it). Partnering with a holistic advisor marketing platform can take some of the stress out of finding leads. SmartAsset AMP works with independent advisors who are ready to grow their book of business and their revenues. Schedule a demo to learn how you can put it to work for your business.
Here’s one more mistake to avoid as a financial advisor: Failing to run a compliant business. Advisors who miss the mark on compliance run the risk of incurring negative attention from regulators which could lead to fines, sanctions, and damage to your brand reputation.

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