A recent study of FPA members shows that the amount and type of communications between financial planners and their clients is directly linked to growth or loss of client base during the financial crisis. Planners were asked how much time they spent communicating with their clients, what methods were used, and whether they had gained, maintained, or lost clients. Of the 314 planners surveyed who said that they worked with clients, 38.9% said that they added five percent or more to their client base over the past year; 7.0% said that they had lost five percent or more; and 54.1% said that they had gained or lost less than five percent.
In regard to time spent with clients, both those who had lost five percent or more of their clients over the past year (59.1%) and those that saw little change (44.7%) spent less than ten hours per week communicating with their clients. Of those who had gained five percent or more, 42.6% said that they had spent ten to nineteen hours per week on client communications. Thus it would appear that planners who spent more time with their clients were more likely to experience the growth of their practice.
Methods of communication also appear to be a factor in the growth of a practice in challenging economic times. While more than 90% of all planners surveyed said that they used personal phone calls to keep in touch with their current clients, only 81.8% of those who lost clients had face-to-face meetings, compared with 93.4% of those who gained clients. Those who gained clients (47.5%) were also more likely to use e-newsletters than those who lost clients (36.4%).
When it came to contacting prospective clients, however, e-newsletters were more likely to have been used by planners who lost clients (50.0%) than those who gained them (38.3%). Personal phone calls and face to face meetings were both used more frequently by growing practices, with 70% of planners saying that they made personal phone calls and 64.2% saying that they met with prospective clients. In comparison, of those planners who lost more than five percent of their client base, only 45.5% made personal phone calls and just half met with prospective clients in person.