By Brendan Frazier
The notoriously high retention rate in financial advice is a double-edged sword.
With an average retention rate of around 97%, losing clients is rare.
That’s the positive. The challenge? Your competitors are holding onto most of their clients, too.
As a result, Advisors are increasingly meeting with prospects who already have an Advisor.
Converting these prospects is different from working with someone who has never experienced professional financial guidance.
Before I was sharing behavioral finance insights as Chief Behavioral Officer here at RFG Advisory, I was a Financial Advisor experiencing this struggle firsthand. In fact, there is one particular prospect I worked with who already had an Advisor that sticks out in my mind to this day.
Warren’s Story
Meet Warren.*
Warren and his wife were in their mid-to-late 70s. He was retired; she was still working (by choice).
He had been with a local Advisor at a wirehouse firm for years but admitted to me early on that he wasn’t overly impressed.
They charged him 1.5% to run an ETF model portfolio on nearly $2 million in assets. As he put it, “They basically just take me to lunch once a year.”
I asked if they had helped with estate planning. No.
What about retirement spending strategies? No.
Naturally, I walked him through how I could provide a more comprehensive approach, potentially at a lower cost.
Then, I introduced the idea of Qualified Charitable Distributions—an opportunity that could help him give more effectively while potentially reducing his tax liability by over $10,000 a year.
On paper, the case for switching was clear:
- Lower fees
- More proactive planning
- A big-picture approach aligned with Warren’s short- and long-term goals
But every time I asked if he was ready to transition, his answer was the same: “Not yet.”
Eventually, I asked what was holding him back.
His response? He was worried about how his current Advisor would take the news.
Even though he saw the potential benefits, making a change felt personal.
Why This Matters
Clients like Warren highlight a crucial reality: Prospects with existing Advisors require a different approach.
Let’s explore:
- Why it’s so hard for clients to leave
- How you can help them make the move
Switching Advisors: Why It’s So Hard for Clients to Leave
Logically, if a client finds another Advisor who offers better service and a stronger relationship, they should make the switch.
But it rarely works that way. Psychological forces can often keep clients from making a change, even when they know it’s in their best interest.
Here’s what might be running through the mind of a prospect considering a switch:
Source: Reddit
- Disentangling might feel overwhelming. They may assume it will be a logistical struggle.
- They could fear unintended consequences. A transfer could result in forced gains, losses, or tax implications.
- What if things don’t change? The fear of making the wrong decision could keep them stuck.
Then, there are the less obvious but equally powerful forces at play:
- Status Quo Bias: Sticking with what’s familiar often feels safer than stepping into the unknown.
- Avoiding an uncomfortable conversation: Many clients, like Warren, hesitate simply because they dread telling their current Advisor they’re leaving.
These factors drive high retention rates across the industry. They also create a challenge when you’re trying to turn a prospect into a lifelong client.
Help Prospects Break Through and Move Forward With Behavioral Finance Strategies
Here’s where many Advisors—including myself with Warren—go wrong:
They try too hard to sell the prospect.
But here’s the reality: They wouldn’t be talking to you if they were truly happy.
They’re meeting with you because they’re looking for something better. They don’t need to be sold. They need clarity, confidence, and conviction.
Here are six ways to help them get there:
1. Uncover the Pain
There’s a reason they took the meeting despite already having an Advisor. It’s your job to find out what it is.
A simple question can open the door:
“What prompted this conversation today?
Or, if you want a more effective option:
“I’m honored that you’re here, and I’m curious whether this is something you would typically discuss with your current Advisor?”
By getting them to articulate their dissatisfaction, they reinforce for themselves why they’re considering a change. Sometimes, saying it out loud is the push they need!
2. Start With the Small Steps
Switching Advisors feels like a big move—new people, new systems, new paperwork. Even if they don’t say it outright, it likely feels daunting.
Instead of asking for one big decision, reduce anxiety by focusing on a small, easy first step.
For example, if they’re frustrated with RMDs they don’t need, offer to show them options for reducing future RMDs.
It’s a test drive—a low-pressure way to experience what it’s like working with you.
3. Normalize With Social Proof
One of the biggest hurdles to switching is fear of making the wrong choice.
Social proof can help to remove that doubt—hearing stories of others who have successfully navigated the switch can make it feel more achievable.
Share a story of a client who was hesitant to switch but later told you, “I wish I had done this sooner.”
The key? Don’t just highlight the decision—they need to see the transformation that followed.
If they see themselves in the story, they’ll likely feel more confident making a move.
4. Provide a Roadmap
Another barrier you must overcome is fear of the unknown.
To alleviate this anxiety and inject clarity, provide prospects with a clear, step-by-step roadmap of what the process will look like.
Related: How Financial Advisors Can Help Clients Set Financial Goals They’ll Actually Stick To
This roadmap should outline every stage with specific timelines and responsibilities, from the initial conversation to the final account transfer.
Example:
- Day 1: We’ll meet to sign documents.
- Day 3: Transfer of assets is initiated.
- Day 7: Everything is complete, and we meet to discuss your new financial plan.
It’s often said that a lack of clarity explains a lack of behavior change. Offering a step-by-step roadmap can make the process crystal clear.
5. Address the Emotional Barriers
For many prospects, the hardest part of switching Advisors isn’t the paperwork or logistics—it’s the emotional weight of the decision. They may feel guilty about leaving someone they’ve worked with for years or dread an awkward conversation that feels personal.
To avoid this becoming a bigger issue than it needs to be, assess with your prospect whether this is an issue by asking:
- “Are you concerned about how your current Advisor will respond?”
- “If they reach out, have you thought about what you’d say?”
If this is a sticking point, offer a simple way to phrase it:
“After much thought, I’ve decided to go in a different direction with my financial planning. I appreciate your work, but I’m looking for a new approach that better aligns with my goals.”
Second, you can help reframe their thinking. Most clients see themselves and focus on their own situation—let them know Advisors have clients leave all the time, and this certainly isn’t the first time it’s happened to their former Advisor.
Related: A 4-Step Framework to Comfortably Navigate Conversations During Times of Market Volatility
6. Shift Their Perspective on Switching Advisors
People struggle to make objective decisions about their own lives—but they give great advice to others.
You can use this to help them see the situation more clearly:
Option A: Highlight the Impact on Others
For example, let’s assume you have a prospect who told you they want to have a legacy of leaving their grandchildren the funds to go to college.
Meanwhile, they’re complaining about the amount of RMDs they’re being forced to take out, and you’ve shown him/her how to potentially minimize their RMDs and the taxes that come with them.
You could respectfully ask: “You said legacy is important to you…how do you think it will impact your grandkids if you continue with the RMD strategy you currently have in place?”
Option B: Flip the Script Around Switching Advisors
Your advice is more likely to hit home when you’re speaking their language.
Imagine your prospect in this situation is a doctor who really likes you and wants to make a switch but can’t pull the trigger because she’s worried about how her former Advisor will react.
Flip the script and ask them:
“If I was a patient and told you that I liked you more and thought you were the best option for optimizing my long-term health, but I was afraid of hurting my other doctor’s feelings, what would you tell me?”
The Bottom Line of Behavioral Finance and Switching Advisors
Winning prospects who are switching Advisors requires a completely different approach than working with someone who has never had professional financial guidance. It’s not about selling—it’s about helping them overcome the invisible psychological and emotional barriers holding them back.
Because what they really need isn’t more persuasion; it’s clarity, confidence, and conviction.
Accelerate Your Growth With RFG Advisory
Growing your business requires more than just a platform—it demands behavioral finance insights and strategic coaching designed to empower you to win even the most challenging prospects.
How RFG Empowers Advisors:
- Behavioral Finance Insights: We equip our Advisors with proven strategies to address the emotional and psychological hurdles prospects face.
- Strategic Coaching: We help Advisors enhance client interactions with clear and conviction-driven guidance.
- A True Partnership: Beyond RIA technology, we provide full-spectrum support that redefines what it means to be a trusted, strategic Advisor.
Ready to book a 100% confidential call and explore how we can partner with you for lasting growth? Let’s Talk.
*The following story is based on real experiences, but names and certain details have been changed to protect privacy. Any resemblance to actual persons, living or deceased, is purely coincidental.
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