Bad Advice Dooms Client Relationships

Financial advisors lose clients for a number of reasons, but most often it’s because of bad advice.

Nearly two-thirds (64%) of the affluent investors who left their advisors within the past two years blame the end of those business relationships on the bad or biased financial advice they received.

In research conducted by Spectrem Group, bad or biased advice ranks far ahead of six other factors that prompt affluent investors to take their business elsewhere.

Failure by advisors to communicate on a timely basis also irks investors; 51% cite that as a reason for switching advisors. Some 39% made a change because of a bad experience with their advisors or their staffs, and 36% were upset that their advisors were not honest or straightforward about fees.

Investors also left their advisors because the firm was involved in a financial scandal (33%), the firm was in trouble with financial industry regulators (33%) or the firm failed to execute a transaction correctly (21%).

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