The importance of Proactive Engagement for brokers


The following guest post is courtesy of Yael Warman, Content Manager at Leverate.

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At the turn of the millennium, when the tech bubble popped (propelled by the 9/11 terrorist attacks in New York City), my parents lost it all.

Yael Warman, Leverate
Yael Warman, Leverate

Their hard earned money, their retirement, gone. Close to US$3,000,000 were depleted to a few hundred thousand.

This didn’t happen overnight though in an unpredicted, unfortunate black-swan-like event, but rather during the course of several weeks during which their broker once assured them the market would turn and then proceeded to avoid their calls. The person they had entrusted with their small fortune was so busy trying to cover the sun with his hands that he forgot to cover my parents’ behind.

Now, my parents are not the only “poor joe shmoes” who this happened to. During the early 2000s, thousands of people lost their fortunes and several investment firms went out of business. Investors were angry, but not only at the fact that they had lost everything they had worked so hard to get, but because their brokers were reactive in their approach, rather than proactive.

Financial trading brokers who are proactive in their approach have a much higher success at retaining traders regardless of whether their client has lost or profited from a trade. Most brokers will call their traders a few hours after the trader’s account has been depleted to ask for more funds, they set alarms for when a trader’s account has reached a margin call, but by then, it may be too late. If you call a trader 12 hours after they have lost money, they are over it, it is water under the bridge and getting this trader to deposit again may be tough. Imagine however that you call the trader immediately after they lose on a trade, or even better, as their trade is declining and say “I notice you are losing money on this trade. How about we re-evaluate your strategy?” Don’t you think a trader will think much more highly of its broker if they engage them proactively rather than if they get a call asking to deposit more money after they’ve lost a ton of it already?

By implementing proactive engagement within your sales strategy, you are getting your traders to associate you with “care” rather than with “problem”. If you let too much time pass between the moment in which your trader had an unsuccessful trade and your phone call, you may end up having to face an angry and frustrated trader who blames you for everything that goes wrong in this world. If you rather call your trader the minute they lost a trade and say “hey, I noticed you had a bad trade. Let’s talk about your next move”, the chances of you having a professional and positive discussion and ultimately overcoming this event are much greater. You are putting your trader back in control.

Brokers who analyze and become knowledgeable about their traders’ strategies and moves can stay a step ahead and either prevent a client’s loss or proactively address it. The opportunity to engage with a client proactively is not limited to losing trades. You can engage with a trader when there is an evident reduction in activity, fast burnout of funds and even on a profitable trade.

Proactive engagement makes traders feel safer about their decisions and about their choice of broker, they generate a more positive perception of the broker in the client’s mind and ultimately create a much more lasting relationship between a broker and a trader.

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The importance of Proactive Engagement for brokers

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