The details matter in interpersonal client communication, says Shafik Hirani
How do you retain clients? This is a question that is top of mind for most advisors, one without a simple or uniform answer. But Shafik Hirani suggests that by combining strong leadership qualities with interpersonal communication skills, he is able to keep clients on board for the long run.
Psychology is a crucial aspect of Hirani’s retention strategy, as he believes clients are inherently looking to be led by their advisors, something that is proven in their communication of a long-term vision. By informing and educating his clients, Hirani says he builds a rapport as a leader who can be trusted with consequential decisions. Hirani claims his firm currently boasts a 93 per cent client retention rate.
“Part of the communication process is very psychological. People follow leaders, and leaders have to provide a vision,” said Hirani, senior investment advisor at Shafik Hirani’s Private Wealth Management. “You can't build a puzzle without a picture of the box. So when you do not have that ability to speak into the future and project that out, advisors will lose clients. And to not do that, you must project out into the future. That's a hard attribute psychologically.”
Clients are often overwhelmed with busy lives and little spare time to scour news on macro trends occurring in global markets. By keeping up with macro trends and passing on this knowledge, Hirani says clients have increased trust in their advisors.
“Clients don't have the time of day to look at the geopolitical climate; what's happening with Russia and Ukraine and the tensions between China and the US. They don't have the time to really dig deep into the macroeconomic conditions or the tariffs,” he said. “It’s a step of connecting all the dots. And when you can do that … It's always met with a lot of gratitude from clients.”
Advisors who exude confidence and initiative are more likely to impress and retain clients, according to Hirani. He says advisors often employ a homogenous, formulaic approach which comes from the banking world, but does not translate well to advising. By encouraging autonomy for advisors at his firm, he says he is able to resonate with high-net worth clients whose own entrepreneurship spurred their financial success. The key difference between average clients and the most affluent is humility, according to Hirani, who finds these clients are generally less stubborn.
“You need to have the right psychology, which is such an understatement I can’t even express it. We've tried to differentiate ourselves as an autonomous, self-employed practice, where you build your own clientele,” he said. “Nobody is conditioning you what to say, and so that helps you give feedback that might resonate with a more entrepreneurial person.”
When clients feel heard, they are more likely to stay, according to Hirani. Disagreements over strategy are inevitable, though Hirani says empathetic and clear communication allows advisors to find an agreeable solution. He says clients are always aware when an advisor is not putting their full attention into a conversation, and when they are not being heard. Communication is not all about speaking according to Hirani, who says being able to listen to clients is as important as being able to talk with them.
“A lot of interpersonal communication is about shutting up and letting somebody else talk,” he said. “It's also about training yourself and your staff not to interrupt people, not to speak over people. That goes a very long way when a client feels heard.”
Training staff is also essential to Hirani, who says that while many on his team are intelligent and educated, they often need to unlearn what they were taught in their schooling. This includes teaching staff to identify whether clients are visual, auditory or kinesthetic learners, a detail which Hirani says makes a considerable difference for client retention.
A self-described introvert, Hirani says he plays to his strengths rather than pretending to be outgoing. He does not organize events at a bar or take clients to hockey games, preferring more personal interactions with clients.
“It is very important to be self-aware and realize; I'm not an extrovert, I'm not good at being the funny guy in the room or the social guy, so why would I try that?” Hirani said.
While many firms choose to outsource their insurance and legal teams, Hirani says employing in-house lawyers and accountants is key to his retention approach. The retention and referral benefits far outweigh the cost of having both departments on retainer, according to Hirani. He also says clients with multiple accounts are more likely to stick with their advisor, as long as the service provided is of high quality.
“You do have to cover cost of accounting and legal, but generally you would attract or retain clients, which is also a revenue source to help fund that cost,” he said.
