Why Clients Leave Financial Advisors (And How to Avoid It)

Losing clients can be a frustrating experience, and when it happens to you, you may be left wondering what you could have done differently. There are a number of reasons why clients leave financial advisors, and there may be more than one cause at work. Understanding some of the most common reasons why clients choose to move on can give you insight into how to better serve the investors you work with.

SmartAsset’s Advisor Marketing Platform offers financial advisors services like client lead generation, automated marketing and more. Learn about SmartAsset AMP today.

Reason #1: Lack of Communication

Poor communication can send the wrong signals to clients. They may feel that they’re low on your priority list and decide to take their assets elsewhere. 

Consider these numbers: Forty-six percent of investors said a lack of clear communication would cause them to search for a new advisor, according to the 2025 Investor Engagement Survey from Capintel. ¹ Meanwhile, 42% said they would look elsewhere if they felt their advisor was not there for them when they needed them. The survey polled 1,000 investors to find out what they want from a wealth management experience. 

Jason Steeno, president of CoreCap Investments and CoreCap Advisors in Southfield, Michigan, says communication breakdowns can happen at critical moments when a client might need their advisor the most.

“Oftentimes, advisors feel that when a client’s portfolio is underperforming or when there’s market turmoil, they shy away from reaching out, fearing a difficult conversation,” says Steeno. In reality, they should be doing the opposite and overcommunicating with their clients when markets are down.

Steeno says that if nothing else, communicating during times of uncertainty can help advisors keep client fears in check and reassure them that their original investment strategy is still a good one. It can also be an opportunity for you to determine if your client has had a change of heart with regard to their risk tolerance, so you can make adjustments if necessary.

Reviewing your current communication policies from a client’s perspective can help you pinpoint any trouble spots or gaps that might lead them to go elsewhere. You can also ask clients directly how you can improve communications, so they feel they’re being heard. A client experience survey can allow them to share, anonymously, how they feel about your firm’s communication policies and other factors that affect the quality of your relationship.

Client Acquisition Simplified: For RIAs

• Ideal for RIAs looking to scale.
• Validated referrals to help build your pipeline efficiently.
• Save time + optimize your close rate with high-touch, pre-built campaigns.

CFP®, CEO

Joe Anderson

Pure Financial Advisors

We have seen a remarkable return on investment and comparatively low client acquisition costs even as we’ve multiplied our spend over the years.

Pure Financial Advisors reports $1B in new AUM from SmartAsset investor referrals.

Target New Clients This Year

I am a registered fiduciary*

Book Your Free DemoNot sure? Learn more about AMP.

Reason #2: Goal Misalignment

The second reason clients leave financial advisors is related to the first. “It’s pretty clear when a client leaves that the perceived value they were getting from an advisor no longer meets their goals,” says Charles Bender, owner of Miami-based investment advisory firm Fiduciary Wealth Management.

The primary reason for this, says Bender, is almost always because the advisor didn’t go above and beyond to communicate their unique value proposition. If you’re only telling and not showing clients how you can help them to achieve their goals, they may doubt your ability to get them where they want to go.

If you’re not staying connected with your clients regularly, it’s possible that you may not have a thorough understanding of their goals or how they’ve shifted since you last spoke. That can put you at even more of a disadvantage since it’s difficult to formulate a plan for meeting goals when you don’t know what they are. Consider developing a plan for regular check-ins, and when you meet with clients, use portfolio visualizers and other graphic tools to your advantage to demonstrate potential outcomes. 

Exceed Client Expectations

Attract HNW clients that fit your firm. Get the all-in-one advisor marketing platform.

Get Started

Reason #3: High or Unexpected Fees

Your clients may understand that your services aren’t free, but they may be tempted to look for a new advisor if they feel they could get a better deal elsewhere. They also do not like to be surprised with fees that they are not aware of before deciding to work together. In a 2023 Morningstar survey, fees ranked as the number three reason overall that investors left their advisors, after poor services and a poor client-advisor relationship. ²  

Cost-consciousness on the part of clients may create pressure on you to adjust your pricing downward in order to be more competitive. However, that can diminish your profit margins and make it more difficult to scale. A better approach may be to reconsider the value you have to offer, as mentioned earlier.

Evaluating the kind of results you’ve been able to produce for previous and current clients can help you better understand what you bring to the table and whether your current fee structure is justified. And rather than repricing down, you may consider how you can add value so that clients feel they’re getting their money’s worth.

You could also consider developing a new service offering that allows you to better meet the needs of your clients, and potentially attract new ones. By expanding your offerings, you can reinforce your value and create opportunities to deliver a better client experience. In the Capintel survey, 45% of advisors said they would move on because of a poor experience.

Reason #4: Poor Portfolio Performance

Underwhelming performance in a client’s portfolio is a common client complaint. In the Capintel survey, 54% of investors said they would consider taking their assets elsewhere if investments performed poorly, relative to their expectations. Your client may expect a certain rate of return, which places a burden on you to deliver results.  It’s important to understand how to put client expectations into perspective as you navigate the planning process. 

First, ask yourself whether the client’s expectations were realistic to begin with. If the client was expecting a 20% return on an investment that historically has maxed out at 12%, then poor performance is not necessarily a direct reflection on you or your services.

If the client’s expectations were realistic, then it’s time to take a closer look at where your strategy might have fallen short. A lack of proper research, for instance, could lead to poor results. Fortunately, that’s something you can remedy.

For example, automating necessary but mundane tasks can free up more time to spend on research and fine-tuning client strategies. Investing in better analysis and measurement tools could pay off if it allows you to produce results that are more aligned with client expectations. Investors do care about tech, after all; 13% of individuals surveyed by Capintel said they would leave their advisor if they relied on outdated tech tools. 

Take a look at your tech stack, starting with the tools you use for portfolio analysis and research. Then consider the other moving parts, such as your customer relationship management (CRM) platform, scheduling tools, meeting tools and marketing tools. If you don’t have the budget to make across-the-board upgrades right now, consider which investments you could start with first to generate the best rate of return. 

Reason #5: Lack of Trust

Overwhelmingly, it’s a lack of trust that can send clients running to the exits. Trust, or lack thereof, was the number one reason investors would leave their advisors, according to Capintel. Sixty-one percent of investors said they would leave if they could no longer trust their advisor to offer them sound financial advice; 72% said that trust is the number one quality they look for when searching for a professional to work with. 

How can you build trust with clients? It comes down to a combination of things, including:

• Transparent and clear pricing
• Clear communication policies and reasonable response times
• Proper disclosures regarding conflicts of interest
• Effective communication that’s punctuated by active listening
• Personalized communications and a genuine interest in who your clients are as people
• Observance of strict ethical and compliance standards

Encouraging trust also encourages loyalty, which can boost both retention rates and referral rates. Ask yourself what your clients need and want most, then aim to not just meet but exceed those expectations. Developing buyer personas or an ideal client avatar can help you gain insight into the thoughts and feelings of the investors you serve. 

Tips for Preventing Clients From Leaving

Once you understand the reasons that clients leave, you can then find ways to do something about it. Your ability to keep clients will depend on several factors, ranging from the economy to what you say directly to them. Here are a few tips that can help you keep more clients:

• Actively listen to your clients: If you want to keep clients, you need to understand them better. The best way to do that is by actually listening to what is important to them. Active listening strategies can help you take in key information and respond to it in a way that ensures a client feels heard. You may also consider using AI note-taking tools during client meetings so that you can stay focused on what the person across from you is saying.
• Stay engaged: Make sure that your clients know you exist. Be active in account management and don’t make them have to ask why you’re doing, or not doing, something. Sending out regular email newsletters, for example, is a chance to keep clients up to date on market happenings and reassure them about any concerns they may have. 
• Communicate often: It’s important to constantly communicate with your clients if you want them to stay. You can have regular status checks with each client, but you can also reach out and send firm-wide updates via email as well. Communicate with clients the way that they prefer. If that means email, then use email; if it’s phone calls or texts, don’t be afraid to reach out through those channels. 

It’s not realistic to expect to keep every client, but nearly everyone can improve their retention rates to a degree. One common problem is that advisors struggle to spend time with their clients because of the time they are spending on marketing.

In fact, 85% of advisors report struggling to find the needed time for marketing with all their other responsibilities. ³ You might be able to save time by finding help with your marketing efforts. Are you looking to expand the marketing of your financial advisor practice? Try SmartAsset AMP, our holistic client prospecting and marketing automation platform. SmartAsset uses a holistic approach to help advisors connect with qualified leads and nurture those relationships. 

Is It Possible to Get Lost Clients Back?

When a client leaves, you may be wondering if they’re gone for good. The answer can depend on what you do next. “It’s possible to draw them back by first finding out why they left,” says Bender. “Most likely, the advisor already knows the reason.”

If you’re aware of why a client chose to leave, you can take steps to address the problems that led to their departure. That might be enough to convince them to reinstate you as their advisor. And if you’re clueless about why a client left, it may be helpful to reach out with a friendly email asking for feedback on what you can improve.

Steeno says winning clients back can be difficult, but it’s not impossible. If they’re still on your email list, for example, you can continue sending them market updates and newsletters. Checking in periodically could also be a useful tactic, as long as the client is open to receiving those calls.

Just be sure to consider the potential return you may get for your time when trying to lure old clients back. “What I’ve found is that much of that energy and attention is better spent in obtaining new clients,” says Steeno.

Bottom Line

Clients are the lifeblood of your business, and it’s important to recognize their value. Understanding why clients leave financial advisors can help you to avoid making potentially costly mistakes. Prioritizing good communication, understanding your client’s goals, measuring performance, and creating added value can all help you to retain existing clients while attracting new ones.

Tips for Growing Your Financial Advisory Business

• You may find more time to spend with your clients by gaining help with your marketing efforts. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Digital tools can make your firm more appealing to clients who are tech-focused. In the Capintel survey, 9% of investors said they might leave their advisors over a lack of tech tools. Consider where you can make your firm more digital-friendly to attract and retain clients. For example, you might develop a mobile app if you don’t have one already, or offer a secure client portal that allows investors to track their accounts on the go. These are relatively small changes that could make a big difference in how likely your clients are to stay with you for the long term. 

©iStock.com/monstArr_, ©iStock.com/simonkr, ©iStock.com/fizkes