In my practice defending broker-dealers and investment advisors from customer complaints, I have seen most clients fail to employ the easiest risk avoidance technique.  Frequent communication with their clients.

Although the advances in technology have improved the ways in which to communicate with your clients, most brokers and advisors do not have adequate communication with their clients.  In many instances, a client complaint can be avoided altogether if there was an open dialogue between customer and professional.

All too often I hear the similar refrain; my broker never spoke with me when the market went south.  Needless to say, the lack of communication leads to acrimony and, potentially, lawsuits.  Minor things become major problems when you do not have frequent, open and honest communication with your clients.

When there are large market fluctuations either negative or positive, you should be in front of your clients.  Clients want to feel that they are more than just a commission to you; they want to know you actually care.  A simple phone call, email or text message to a client that you understand the situation, are available to discuss it, and are prepared to assist the client pursue their goals and objectives goes a long way to diffusing what may otherwise be a difficult situation.

What many professional lose site of is that, every time you have client contact, you improve your chances of the client increasing their investments with you or referring a family or friend.  Even when times are bad, every single instance you speak with your client you have the opportunity to market yourself and increase your business.

I recommend direct personal contact, such as a telephone call, on at least a quarterly basis.  If there is significant market volatility, you should increase the frequency of contact.  In addition, you should meet with your client face-to-face, on at least a yearly basis.

By maintaining consistent contact with your clients, you will, more than not, have a satisfied client.  In the end, client communication can only help you avoid the risk of being sued and improve your chances at business development.  Do it and watch the results.