Acquisition or Retention: Which Strategy Builds Your Practice Better?

Ask a group of financial advisors which client activity is more important – acquisition or retention – and chances are their replies will be divided equally between the two choices.  It’s a question every advisor struggles to answer correctly: do I focus my work day on finding new business or do I allocate my time on efforts that solidify relationships with standing clientele?

Make The Right Choice

The debate over which answer is correct is as paradoxical as trying to argue which came first – the chicken or the egg.  Acquisition and retention strategies are not mutually exclusive.  For an advisory practice to consistently grow, both strategies must be implemented simultaneously because together, they form a symbiotic synergy where the whole becomes greater than the sum of its parts.

A reality of the advisory profession is that no matter how good you are, you will lose clients.  Some clients will unfortunately die.  Others will be pirated away by the competition.  A few will relocate and prefer to work with an advisor in their new hometown.  Some will become dissatisfied for reasons known and unknown and terminate the relationship.  Regardless of why they leave, the result is the same: they’re gone and they must be replaced.  It’s why client acquisition must be an ongoing process in every advisory practice.

Merge Acquisition And Retention Strategies

In many advisory practices, client acquisition and retention strategies are disconnected marketing components in a zero-sum game.  For every client acquired, another one is lost. They continually shift focus back-and-forth from one strategy to the other only to find themselves trapped on a miscalculated marketing merry-go-round that takes their practice nowhere.

High performance advisors and advisory teams take a more proactive approach.  They understand that without an acquisition plan, they will eventually have fewer clients to retain.  On the flip side, they also know that without retention strategies in place, they’ll lose clients and one of the lowest cost ways of bringing in new business – referrals.  The reason they succeed while others struggle is because they proactively synchronize acquisition and retention strategies together rather than view them as separate and distinctive propositions.

Not all advisory practices are the same.  Some are more challenged by acquisition and some by retention.  Leveraging the right amount of time and effort will vary depending upon each firm’s unique situation but the formula for success will always remain the same:  both strategies must be implemented concurrently for a consistent and predictable growth.

Retention Fuels Acquisition

Keeping clients is always easier and less costly than finding new ones; however, for your practice to grow, you’ll have to continually acquire.  Maintaining the status quo is never an option because it’s a myth.  Your practice is either expanding or shrinking.  There is no safe middle ground.

Top advisors and advisory teams place equal value upon acquisition and retention.  How they allocate their time and resources may vary, but their commitment to each is unwavering.  They’ve learned that by implementing both strategies symmetrically, they can “have their cake and eat it, too.”

Balance your practice’s client acquisition and retention strategies correctly and growth is inevitable.  You’ll also gain a powerful competitive edge because it’s estimated that less than 40 per cent of companies and agencies have an equal focus on both strategies.  In a time when differentiators separating one advisor from another are evaporating, how you acquire and retain your clients can become a defining component in your value proposition.

Learn More

Like this tip?  We have many powerful lessons and proven strategies to help you become a million-dollar financial advisor and beyond. Contact us today and find out how we can help you focus on client acquisition and retention strategies.

Altius Learning


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