How to Keep Investors from Walking Out the Door when Performance is Down 


As an investment professional, you know all too well that sector performance has been down over the last decade. With this reality, keeping your investors happy and loyal to your firm requires more than impressive returns — you must offer an overall better relationship.

Successful relationship management requires more than just good financial performance. It necessitates transparency, personalized reporting, and robust human interactions. These considerations have gained more significance over the last decade, given the sector performance decline.

According to a report from CNBC, nearly 80% of active fund managers are underperforming compared to major indexes. More alarmingly, it’s shaking investor confidence. However, this situation presents an opportunity to reassess investor management strategies and implement a more client-centric approach.

The Magic Triangle — Transparency, Customized Reporting, and Relationship

Investors are not naïve. They’re aware of the market dynamics and understand that returns can’t always be extraordinarily high. Consequently, during these downturn phases, it is crucial to keep them content in other ways.

  • Increasing Transparency

Being transparent in finance requires a delicate balance, ensuring clients are informed while still fostering confidence in your services as a financial advisor. The key to enhancing transparency is trust—after all, you’re guiding the path to your clients’ dreams and aspirations. During market downturns, the need for honest and forthright communication becomes paramount.

To strengthen transparency with your clients, consider these strategies:

  • Open communication: Encourage open and consistent communication with your clients. Keep them informed about market trends, the reasons behind downturns, and your plans for navigating rough waters. Regular updates can go a long way in reassuring your clients that you have their best interests in mind.
  • Clarity: Clients need a clear understanding of their situation. Avoid using financial jargon or over-complicating explanations, and instead, simplify the information in a way that clients can easily digest.
  • Vulnerability: It’s important to acknowledge when things aren’t going well and to admit when you’re unsure of the future. Being vulnerable can strengthen the advisor-client bond, as it shows you’re a genuine partner in their investment journey.
  • Taking responsibility: If part of the underperformance is due to your recommendations or actions, own up to your mistakes. Taking responsibility can help maintain your clients’ trust and demonstrate dedication and commitment to finding solutions.
  • Document sharing: Provide clients with easy access to their financial documents, reports, and resources through secure online channels. Empower them with information to reassure them of the progress and guide them towards their long-term financial goals.
  • Fee transparency: Be open and upfront about your fee structure. Clients should understand the cost of your services and how these fees contribute to their broader financial partnership. Ensure there are no hidden costs, as this can erode trust.

By fostering transparency in these three key areas, you can enhance trust and overall client satisfaction, ensuring they remain loyal to your firm, even during periods of underwhelming investment performance.

  • Providing Customized Reporting

The modern investor wants more than just raw data; they seek a personal touch and customized insights tailored to their specific interests, goals, and circumstances. Recognizing this need for an individual approach to client reporting can significantly improve client engagement and satisfaction, especially during times of market instability. 

Here’s how to effectively implement customized reporting:

  • Understanding your client: The first step towards effective customized reporting is to understand your client—their investment goals, risk tolerance, and financial knowledge. Some clients may prefer detailed analysis while others might appreciate a simple, layman’s terms explanation. Tailoring reports to each client’s preference can help them better understand and appreciate your efforts.
  • Data presentation: Using interactive charts, graphs, infographics, and other visual aids can help clients understand their portfolio’s performance more effectively than raw numbers. Data visualization makes information more digestible and engaging.
  • Strategic emphasis: Focus the report on details that matter most to the client. For a risk-averse investor, showcase steps taken to mitigate risk. For an investor keen on a specific sector, include more insights about that sector.
  • Frequency and timing of reports: Not all clients prefer the same level of communication. While monthly updates may work for some, others may prefer quarterly or annual updates. Aligning the timing of reports with your clients’ preferences is a crucial aspect of customization.
  • Highlight long-term perspective: In times of market uncertainty, it’s important to remind clients about the long-term perspective. Customized reports should not only discuss recent performance but also how the current strategy aligns with long-term goals.

By providing reports that are specifically tailored to each client’s circumstances and preferences, you convey that you understand their unique needs and are actively working to meet them. In turn, this fosters trust and satisfaction, helping retain clients during challenging market downturns.

  • Enhancing Client Relationships with Better CRM

Client Relationship Management (CRM) systems are a vital tool for any financial advisor. They go beyond simply tracking client details and communication, offering numerous features to automate and enhance customer engagement, improve efficiency, and bolster the client-advisor relationship. 

Here’s how you can leverage CRM to deliver the right message to the right client at the right time:

  • Centralized Information: A CRM system consolidates all client data in one place, providing a 360-degree view of the client. As an advisor, you can track clients’ financial goals, risk tolerance, family situation, life milestones, and more. This comprehensive understanding enables tailored advice and personalized communication.
  • Automated Communication: CRM can automatically send regular market updates, meeting reminders, or personalized messages on birthdays or anniversaries. This proactive communication saves time and keeps clients engaged, fostering stronger relationships.
  • Segmentation: With CRM, advisors can segment clients based on various parameters like risk profile, investment preferences, net worth, etc. This segmentation aids in delivering targeted and relevant communication, improving client satisfaction.
  • Efficient Task Management: CRM systems assist with task management and follow-ups, ensuring nothing slips through the cracks. For instance, reminders for client check-ins or alerts for portfolio rebalancing can help advisors work more efficiently.
  • Analytics and Reporting: CRMs can analyze client data to provide actionable insights. You can assess the effectiveness of different communication strategies, track client interaction patterns, or identify upselling and cross-selling opportunities. This analytical capability helps in refining strategies and enhancing client service.
  • Security: With robust security features, a good CRM system can ensure sensitive client data is safe and secure, cultivating trust and demonstrating your commitment to protect your clients’ information.

CRM systems are more than just a client database. Effective use of CRM can streamline your business processes, manage client interactions efficiently, identify opportunities, and enhance client engagement. A well-implemented CRM system can provide substantial returns in the shape of improved client satisfaction, retention, and ultimately, business growth.

WealthBlock: Your One-stop Solution

WealthBlock offers a white-label capital raising and investor management platform, streamlining investor outreach with an all-in-one system. The platform’s superior UI/UX, quick setup time, and tech agility enable customized solutions to match your firm’s unique needs.

With built-in features like CRM, Data Room, Offer Builder, Investor Journey Builder, Email Automation Builder, Engagement Analytics, and more, WealthBlock ensures you keep your clients delighted even when investment performance isn’t at its peak.

Move forward with confidence, knowing that WealthBlock has your firm’s needs covered. Visit WealthBlock for more information or schedule a demo today.