“I think the acquisition of consumers might be on the verge of being mapped. The battlefield is going to be retention and lifetime value.” – Gary Vaynerchuk
Relationships are the foundation of long-term success, but even the best advisors lose clients. A missed call here, a delayed update there. Over time, small lapses create space for doubt, and that’s when clients start to look elsewhere. The costs are stiff, whether you’re a business owner or independent advisor:
The 2024 RIA Benchmarking Study from Charles Schwab found client retention rates across the industry hover around 97% over the past decade. That sounds strong, but it still translates into meaningful losses when compounded over time. Other research highlights a sharp drop-off in the early years: 20% of clients leave in the first year, and 25% by the second, according to AssetMark.
When you consider the cost of replacing a lost client—five to seven times more than retaining an existing one, per Forbes—it becomes clear why attrition is one of the most expensive risks an advisory firm faces.
So why do clients leave? The short answer: it’s rarely about performance. A 2021 report from McKinsey’s PriceMetrix division found that even in volatile years, advisors retained more than 94% of clients. The data indicates markets aren’t the deciding factor—relationships are. Communication, trust, and the sense that an advisor understands a client’s broader goals matter far more than quarterly returns.
One of the most consistent themes in the data is communication. Financial Advisor Magazine reports that nearly 72% of former clients cited poor communication as the primary reason they left their advisor. Some said they felt their advisor didn’t check in often enough. Others said they weren’t kept informed when markets shifted, or that their advisor failed to connect portfolio strategy to their personal goals. The outcome is the same: silence leaves room for doubt, and doubt erodes trust.
Another driver is scope of service. Today’s clients expect more than investment management. They want estate planning guidance, tax strategies, philanthropic advice, and support through major life transitions. Morningstar notes that clients who believe their advisor understands their full financial picture are far more likely to stay loyal over the long term. A gap between expectation and delivery—no matter how strong the performance—creates vulnerability.
The solution isn’t to work harder but to work smarter. Fulcrum was built with this exact challenge in mind. By providing an integrated platform for client engagement, communication, and execution, it allows advisors to deliver value consistently and efficiently. Defining success collaboratively with each client, ensuring communication is proactive and personalized, and delivering a broader suite of services—these are the levers that close the gap between expectations and reality.
Technology can play a powerful role here. During periods of volatility, the ability to send timely, contextual updates directly through client portals or mobile access points helps reinforce confidence when clients need it most. Barron’s reported in 2023 that frequent communication during downturns can prevent clients from leaving for short-term promises elsewhere.
Fulcrum’s integration of portfolio management, tax-efficient trading, and alternative investments also ensures that advisors can offer a more comprehensive experience—without adding administrative complexity. The result is not just better communication, but more meaningful communication, supported by tools that make personalization scalable.
Improving retention doesn’t just stabilize revenue—it drives growth. According to Harvard Business Review, increasing client retention by as little as 5% can increase profitability by 25 to 95%. For an advisory firm competing in an increasingly crowded market, that edge can make all the difference.
Ultimately, clients don’t leave because of a single bad quarter. They leave when they no longer feel understood, valued, or connected to their advisor. Advisors who invest in communication, broaden the scope of their services, and deliver consistently across market cycles are the ones who keep their clients for the long haul. And with the right platform in place, that level of engagement becomes not just possible, but repeatable.
Find out how you can strengthen client relationships and reduce attrition through Fulcrum’s customizable, comprehensive, and intuitive wealth management platform.
Fulcrum Equity Management, LLC, doing business as Fulcrum Wealth Management Management, is an investment adviser registered with the SEC. Fulcrum Wealth Management only conducts business in jurisdictions where it is properly notice filed, or is exempted from such filing requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.
Content should not be viewed as personalized investment advice. All investments and strategies have the potential for profit or loss. Index performance does not represent results obtained by Fulcrum Wealth Management and does not reflect the impact that advisory fees and other expenses will have on the returns. There are no assurances that an investor’s portfolio will match or exceed any particular benchmark. Alternative investments are speculative, may be susceptible to fraud, involve a high level of risk, and may experience significant price volatility. You could lose all or a substantial part of your money, and your interest may be illiquid. They may involve complex tax structures and higher fees.
