He noted that he began assessing the data from advisors’ books of business a decade ago, and his research showed that a “5% overall retention rate increases the net value of the book by over 41%. You need to pay attention to that.”
On examining both the data advisors provide, and that which it mines from their other financial tools, he said most advisors only interact with four or five clients a day, so don’t often look at their full book and how they can mine it for more business opportunities with their current clients. Those customers could drift away or give more assets to others. In fact, he said, banks don’t even notice they lose 30% of chequing deposits a year, and advisors are susceptible to that “silent erosion”, too.
Read more: Why women invest differently than men
While advisors have a big task managing several hundred clients who are susceptible to various market trends and life events that could impact an advisor’s book of business, a well-managed CRM system could show them how clients’ buying patterns respond to advisors’ sales patterns.
“We’re finding that a 10% change in your A, B, and C customers drives your book value up by 60%,” said Buck. “A CRM needs to become smarter and more proactive. It needs to be your sales assistant because a digitally smart CRM can help you become more proactive with your customers.”
