By Paul Katzeff, Investors Business Daily
As a financial advisor, when a key source of your income doesn’t like you and your service, that should grab your attention. When that customer dislikes you enough that he or she would not recommend you to other potential clients, that should keep you awake at night.
And that’s precisely the dilemma facing many financial advisors with a big part of their most valuable clients. A whopping 45% of millionaire clients would not recommend their advisors to other potential clients, according to a new survey by Fidelity Investments.
Advisors know that that’s not something they can afford to ignore. Financial advisors depend on referrals for a big portion of their new business. Referrals from current clients generate 48% of new business for advisors, according to a separate Fidelity survey of registered investment advisors (RIAs). That’s a key driver of organic growth for advisory firms.
Fidelity calls those unhappy clients “detractors.” One of five millionaire clients fall into that group. They are unhappy enough that they might leave their advisors. And they are unhappy enough to discourage other people from working with their advisor.