Client concern resolution strategies every financial advisor should know

In financial advising, trust isn’t just important – it’s everything.

Clients rely on their advisors to safeguard life savings, guide retirement planning and help shape their financial futures.

But even the most skilled and attentive advisor will eventually face a dissatisfied client. Whether the issue stems from market volatility, communication gaps, unmet expectations or simple administrative errors, complaints are inevitable. What truly matters is how you respond. The way you handle client concerns can either reinforce your credibility or undermine it.

“How an advisor responds to a complaint is an opportunity to come out on the other side with an even stronger, deeper, more trusting relationship than they had before the complaint happened,” says Joy Slabaugh, a CFP and licensed therapist who counsels advisors and their clients about the emotional dimensions of wealth and money.

In this guide, we’ll walk you through the essential steps of resolving your client’s operational concerns process. We also have insights from advisors to help you address operational and service concerns, preserve relationships and even turn conflict into an opportunity to build deeper trust and elevate your reputation.

For any matter that may fall under regulatory definitions of a complaint, consult with your Chief Compliance Officer (CCO) or refer to your compliance policies and follow all applicable regulatory requirements, in addition to your client service process.

Why prompt resolution matters

Client retention: A well-managed complaint can transform a frustrated client into a loyal advocate. Studies show that clients are more likely to stay with an advisor who effectively resolves their concerns, rather than one who never encounters issues but remains distant or impersonal.

Regulatory compliance: In a highly regulated industry, the improper handling of certain complaints can trigger scrutiny from the SEC, FINRA or state agencies, potentially leading to fines or disciplinary action. It’s important to distinguish between everyday service issues and formal regulatory complaints which will be defined in your compliance policies. Below are some common examples.

• Service issue: A client is upset about a delayed statement or trouble accessing their online account. This can be resolved internally with prompt communication and follow-up.
• Regulatory complaint: A client alleges unsuitable investment advice or mishandling of funds. This requires documented handling and reporting in accordance with SEC and other applicable requirements.

Reputation management: In the digital age, negative reviews can spread quickly. A single unresolved complaint can harm your reputation across social media and advisor review sites, while a positive resolution story can boost credibility and trust.

Common sources of complaints

Before you can effectively resolve complaints, it’s essential to recognize where they often originate:

• Misunderstood risk profiles or investment objectives
• Poor communication or perceived lack of responsiveness
• Unexpected fees or unclear billing
• Losses due to market downturns or misaligned expectations
• Administrative or clerical errors
• Delays in transactions or transfers

Understanding the root causes of complaints will help you be proactive in preventing many of them and be prepared to resolve those that arise.

Step-by-step guide to resolving client complaints

Step 1:

Stay calm and listen actively: When a client voices a complaint, your first responsibility is to listen – genuinely and without interruption. Avoid becoming defensive. Let them speak fully, and use active listening techniques to demonstrate your engagement. Verbal cues like “I see” or “I understand,” along with paraphrasing – “So what I hear you saying is…” – can help diffuse tension. Ask open-ended questions to clarify the issue. Often, clients just want to feel heard, and giving them space to vent in a respectful environment can go a long way.

“Take a beat. Give yourself a moment to breathe, recognize what you’re feeling and acknowledge that within yourself,” says Slabaugh. “Then when you’ve set that aside and you’re able to think about the situation from a place of calm, that’s when you're ready to engage with your client on the topic.”

“Listen to your client. Don’t try to talk them out of it, or try to tell them they're wrong, just let them speak,” says Brett Bernstein, CEO of XML Financial Group, headquartered in Bethesda, Maryland.” Sometimes people just want to be heard, and that's all they need.”

Step 2: 

Acknowledge the problem: Acknowledging a concern doesn’t mean accepting blame – it signals empathy and professionalism. Simple phrases like “Thank you for bringing this to my attention,” or “I understand why you’d be upset. Let’s work through this together,” can reassure clients that their concern is valid and that you’re taking it seriously.

“No complaint should be ignored,” says Tobias Maag, a certified financial planner and coach who has been an independent consultant to the banking and financial services industries for decades. “Your reputation might be at stake.”

Step 3:

Investigate thoroughly: After the initial conversation, thoroughly examine the issue. Review call logs, documents, transaction history and notes. If needed, consult with internal staff, compliance officers or custodians. Identify the cause of the problem and assess if there was a service lapse or miscommunication on your end. Maintain detailed records of your findings and all client communications – essential not only for compliance but also for transparency.

“I’m always going to lean on getting compliance involved as early as possible if there is a complaint,” says Winston Justice, CEO of Sage Spring Private Wealth in Franklin, Tennessee.

Step 4: 

Communicate the resolution clearly: When you’re ready to share your findings, do so honestly and clearly. If a mistake was made, acknowledge it and explain the steps you’ll take to correct it. If not, communicate the facts without sounding dismissive or defensive. Proposed resolutions may include an apology, a fee adjustment, a portfolio review or improved communication methods. Always invite the client to ask questions or share their thoughts on the proposed resolution. This reinforces collaboration and trust.

Step 5: 

Follow through and follow-up: After agreeing on a resolution, execute it promptly. Assign tasks, set deadlines and ensure no detail falls through the cracks. Then, check in after a week or two. A quick phone call, a note or a scheduled review can show the client you care beyond the moment of conflict. This kind of follow-up can turn a negative experience into a loyalty-building opportunity.

“Now you’ve gotten more data on your client,” says Slabaugh, who is also the founder of the Wealth Alignment Institute. “If a client values frequent communication or detailed explanations, make that part of their profile. Complaint resolution is a chance to get to know your client better — and serve them more precisely in the future.”

Best practices for preventing complaints

While complaints can’t be avoided entirely, you can significantly reduce them through proactive service. Start by setting clear expectations from the beginning. Explain your services, fees, investment philosophy and communication style during the onboarding process. Misaligned expectations are a leading cause of dissatisfaction.

“Advisors need to be very clear about the services they offer and what the client will likely experience,” says Megan Gorman, founder and managing partner of Chequers Financial Management, in San Francisco, California. “Advisors need to over-communicate, particularly when it is something complex or something with a great deal of risk.”

Document everything. Detailed notes on client conversations, preferences, and decisions provide essential context in the event of a dispute. Communicate proactively – reach out during market shifts, even if there’s no major news. Clients appreciate being kept informed.

“Give clients updates throughout the year,” says Trevor Johnson, founder of Dream Weaver Financial Planning, based in the greater Chicago area. “When the markets drop or when they go up a lot, give clients an update on their portfolio. Let them know what’s going on, so when they see the headlines, it basically matches what’s being said. There are also opportunities when markets go down if they’re able to add more assets.”

If you have a team, ensure they are well-trained in communication, compliance and client care. Consistency in client experience matters. Also, regularly ask for feedback. A simple follow-up after meetings – “Was there anything we could have done better?” – can uncover minor issues before they become formal complaints.

When to escalate or report a complaint

Some complaints may require escalation or even formal reporting. Be prepared to involve your firm’s leadership or compliance team in cases involving allegations of misconduct, significant financial losses or legal threats. Know your regulatory obligations – whether under FINRA, the SEC or state agencies – and act promptly. Delayed reporting can worsen outcomes for both you and the client.

Turning complaints into growth opportunities

Handled correctly, complaints provide valuable insight into areas of your practice that may require attention. Look for patterns. Are there recurring concerns? Could more transparent communication or updated onboarding materials prevent confusion? Use complaints to refine your service model, train your team and improve client touchpoints.

Track complaints systematically and review them regularly to ensure effective management and resolution. Doing so not only helps mitigate risk but also drives continuous improvement.

“We always want to track complaints and our response to them as well,” says Justice. “We want to have documentation on both sides.” 

Takeaway

Resolving client complaints isn’t just a box to check – it’s a pivotal opportunity that can either strengthen trust or erode it. Advisors who respond with empathy, professionalism and accountability often develop deeper client relationships and a stronger reputation.

While performance is important, how you navigate difficult moments speaks volumes. When you approach complaints as opportunities to listen, learn and lead, you don’t just preserve your practice – you elevate it.

“Ultimately, resolving complaints isn’t just risk management – it’s relationship optimization,” says Slabaugh. “And in high-net-worth relationships, emotional alignment matters just as much as performance. The advisors who embrace this truth are the ones who retain loyalty, referrals and long-term trust.”