In the wake of the economic downturn that pummeled markets and investor accounts, one would think financial advisors would have learned that forging and maintaining extensive contact with their clients is critical to keep and finding new business.

But according to a poll conducted by SEI, a provider of investment processing, fund processing and investment management business outsourcing products, 62% of financial advisors don't communicate with their clients on a regular basis and acknowledge this flaw is their greatest failing when it comes to providing service to investors.

Perhaps more concerning is the fact that only 42% of advisors queried said they asked one-quarter or fewer of their existing clients for new client referrals, making it even more difficult to replace the customers they're sure to lose over time.

"Frequent and meaningful communication, delivered in a variety of ways, is the best method to build lasting trust between advisors and clients, which ultimately leads to stronger relationships," John Anderson, head of practice management for the SEI Advisor Network, said in the report. "Yet advisors remain stymied by the task."

"Whether they’re communicating with clients or prospects, it’s the same story -- advisors should be more proactive," he added. "The best way to get ahead in today’s competitive landscape is to spend more time in front of clients and prospects, providing valuable information."

The survey results provide an interesting anecdotal addendum to last month's survey of high net worth and ultra net worth clients by Chicago-based Spectrem Group which found that nearly 40% of investors with a net worth of between $1 million and $5 million said they expect a call back from their advisor within two hours or else they would consider making a change and finding another financial professional to service their accounts.

To increase the frequency of their contact with clients, some advisors have turned to social media sites and tools to introduce themselves to potential new clients and keep tabs on the ones they already have in the fold.

But despite the stunning popularity of Facebook, Twitter and LinkedIn, only one in five advisors surveyed said they connected with at least one new prospective client last year, a sign that most advisors still aren't comfortable with the social media platform and that some broker-dealers are still banning them from using the sites due to either technological or compliance and security issues.

"Most advisors naively think they can run their practice simply by keeping their current clients happy," said A. J. LaVallie of The Advisors Group of Chicago, LLC.  "The reality is there’s a hole in the bottom of every advisor’s bucket and it has to be filled with new clients and assets. The down market was a huge wakeup call for advisors that keeping clients is only half of the equation. Successful advisors are proactively reaching out to prospects and converting them."

To help facilitate better communication with clients, the SEI Advisor Network this past year held a total of 35 interactive practice management workshops around the country. The firm said more than 700 advisors -- none of whom worked with SEI -- registered and participated in the conferences and immersed themselves in marketing tips, tools and techniques and got to test-drive SEI's proprietary Return on Time Calculator to figure out exactly where their time is being spent -- or misspent -- on client services.

One activity that advisors aren't wasting any time at all on is dialing the phone. Exactly none of the advisors surveyed by SEI said they cold called prospective new clients last year on the phone.

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