Client Retention Tips from a 401(k) and Wealth Adviser

Grant Ellis first ran his advisory practices solely as qualified retirement plan advisement shops.

Ellis, who now works out of his office in the Memphis, Tennessee, metropolitan area, had experience on the recordkeeping and third-party administrator side of the business, as well as experience founding multiple 401(k) advisories. As time passed, his plan sponsor clients—some of which he’d been working with for more than a decade—started requesting wealth management services. Finally, Ellis decided he needed to offer that service as well.

“I kind of had that altruistic view of, ‘No, we do [plan advisement] well, and that’s it,’” says the founder of Ellis Retirement Services LLC, which he started about three years ago. “Then, we had enough people saying, ‘We trust you, will you please help us manage our money?’ That made me re-evaluate.”

Grant Ellis

Ellis says he took a solid two years to build out the wealth side of his practice. Those clients are mostly business owners or executives overseeing plans. The plan participants, he says, are a separate group with which his firm interacts on financial education and guidance, not wealth management. But despite running what he calls “completely separate business models,” there is one area for which the methods are the same: client retention.

“Client retention is not different for wealth or 401(k) [advisement] and, actually, that’s part of the point,” Ellis says. “Everything that’s different creates friction in the process. So even the way we maintain and retain our clients, we approach theoretically in the same way.”

Ellis says the overarching approach to client retention and attraction comes down to the simple premise of, “How much can we help?” Rather than focus on short-term needs and fees, the adviser says his team’s focus is on the long-term.

“I’ll help you as much as I can forever as long as I can do it in our model,” he says. “We lead with good will. Do really, really good work for people, and you’ll be amazed at what comes your way.”

That model, he says, has helped him see zero client attrition in the past five years. In addition to his overarching philosophy of focusing on client needs, Ellis identified three tips for client retention.

“We want 90% of our year planned out,” Ellis says. “Marketing, prospecting, operations, client service—everything. If we can systematize it, that’s the only way you can scale it.”

Ellis says retaining business is about being proactive, not reactive. His team uses project management software in both the plan and wealth spaces to help ensure that workflow. He leaves the 10% to 15% of “other” time to the unexpected. That could be a client suffering a death in the family. Or a broader industry change, such as the passage of SECURE 2.0 legislation.

Technology plays a big role here, he notes. After some initial resistance to software and programs that systemized workflows, he is now a firm believer in them to help run his practice.

“I don’t know how they used to do it before,” he quips.

“We set very clear expectations with our client base,” Ellis says. “Not only do we set all these items up for the year, but we tell our clients what we’re doing, so they know exactly what to expect for the next 12-month period.”

Ellis has seen research noting that the No. 1 reason advisers get fired is lack of communication. To avoid that, he says, it is important to have an “ongoing narrative” with a client to prevent the “fear” that comes with not knowing what’s going on.

“Any piece that’s not overtly expressed, they’re going to fill in … and it’s usually negative” he says. “For us, we are clear about what’s going to happen, and then we execute on it.”

Ellis notes that, while such a system may seem impersonal, it frees up his firm to focus on areas that do need a personal touch.

3. Over-communicate, over-deliver

Ellis says that when a new employee joins Ellis Retirement, they are often surprised at how much his firm communicates with clients. It’s a strategy he says ensures that plan sponsors and individual investors are never questioning whether a form was processed or a task completed.

“Nothing goes from being a task to done,” he says. “It goes from a task to ‘in process,’ because our job is to make sure that we’re seeing things through completion and communicating those touchpoints with the client along the way.”

As an example, he says, if a client is doing a rollover, the firm is very clear about the timeline and process from start to finish. That includes warning the client of delays in the process stemming from the financial firms involved—something totally out of that client’s or Ellis’s control.

“We’re very adamant about saying, ‘This is typically the way it works, but sometimes it falls apart,’” he says. “I’ve found that honesty is very important. … We’re here to walk you through that process; we are here to handle it; and we will keep you up to date every step of the way. That is a big part of how we have retained clients.”