Independent financial advisors have a lot of details to manage. So it’s not surprising that they sometimes let certain tasks and other details fall by the wayside. However, there are a few problem areas that all financial advisors should try to avoid when dealing both with client information and with clients themselves.

Keeping Client Info Safe

When working remotely, advisors should be sure to using a secure password to protect their online accounts. In order for a password to be secure it must include multi-factor authentication. People often misplace their phones or tablets and sometimes these devices, unfortunately, can get stolen. If you have client information on one of your devices, the last thing you want to do is allow someone to figure out your password and get access to it. That’s why some technology experts suggest using password managers that are either free or fairly priced. Some include RoboForm1Password and LastPass. (For more, see: 10 Best Tools for Financial Advisors.)

These services use technology that helps users to choose a secure password and they also manage a list of encrypted and secure passwords for all of their devices and programs. Using one of these programs will help advisors to ensure that their sensitive data remains secure while also making it easier for them to recall their passwords.

Advisors may use their computers or smart phones in public places and log onto less-than-secure public Wi-Fi networks. And while most advisors at this point have anti-virus software and firewalls set up on their computers, tablets and mobile devices, their data is not always being protected in the way that it should be.

A solution for making the information on your computer safer is the purchase and use of a personal virtual private network (VPN) from service providers such as Cloak for Mac and iOS devices, or VPN One Click for Android devices, or Private Internet Access for PCs. These services encrypt Wi-Fi access, so as to protect confidential client and personal data when working in a public place. (For more, see: Tips for Securing Financial Advisor Client Data.)

Focusing Only on Monetary Goals

Clients often come to financial advisors with a variety of problems that may stem from money issues but go much further. They may be dealing with health or relationship issues, or concerns about how they're remembered. An attentive advisor will be able to look deeper into the various issues a client is having and offer services that the client might find helpful. These services could include wellness seminars, access to exercise coaches or personal trainers, legacy planning and charitable giving advice. 

Some clients may also be dealing with aging parents, or having issues concerning their children or grandchildren. Recent retirees may also be having problems transitioning out of work and into retirement and feeling a loss of their identity. That’s why advisors need to take the time to try and understand all aspects of a client’s life. Knowing more about the person rather than the account can pay dividends in client satisfaction, retention and referrals. (For more, see: How to Be a Top Financial Advisor.)

Hosting Lame Client Events

Clients typically come to advisor-led events to learn steps they can take to improve their financial lives. That said, giving clients tips on how to better manage other areas of their lives can set you and your event apart. Even teaching clients about some of the interests and hobbies the advisor may have outside of work can help to make a dry event about money management and estate planning a bit more lively. Or offer to take your clients on trips of interest, such organizing a wine tasting outing. It’s a great way to bond with clients and make them feel appreciated.

Incessant Referral Requests

Your clients don’t want to be pestered into finding you more clients. A better tactic to increase your client list would be to build up a reputable business and let your reputation bring clients to you. Clients are more likely to recommend an advisor when they are happy with the services they are receiving, rather than when they are asked by their advisor to find them more business. If your clients understand all the services you offer and know that you are looking to grow, they will be more likely put out a good word for you. (For more, see: Top 10 Lead-Generation Tips for Financial Advisors.)

Failing to Set Up a Succession Plan

As it turns out most advisors — particularly sole proprietors — don’t have a succession plan in place. This can be a problem, not only for your business, but for your clients and the future of their money as well. No one knows what may lay ahead, so it’s always best to be prepared for any outcome rather than leaving the future of your business and your clients' accounts up in the air. (For more, see: Advisors Should Factor Clients Into Succession Plans.)

Advisors who are in their 50s or older should already be making sure that they are training younger talent that they may bring on board to, one day, take over the business. This includes mentoring them about the ins and outs of the business and naming one’s future successors. Advisors may also choose the route of selling their business to another sole proprietor, but plans to make that happen should also be in place. Whichever way you choose to go, your clients will feel more secure knowing that you too have planned for the future. (For more, see: How to Create a Business Succession Plan.)

The Bottom Line

Advisors take very seriously the security of client information, whether they are providing all the services that their clients need, and planning for the next generation of their business. They should also avoid constantly asking clients for referrals. Minding these will help attentive advisors avoid some of the most common problems facing them. (For more, see: Top Tools Every Financial Advisor Needs.)