Ask most partners when they lose clients and they will say the first year — the onboarding friction, the paperwork, the first drawdown. The data in our own book says something different. Attrition is low in years one and two, and then roughly doubles in year three.
The third-year cliff
The pattern is consistent enough to be worth naming. A client joins with a problem: a lump sum to deploy, a goal to fund, a portfolio to clean up. The first eighteen months are spent solving it. Then it is solved — and nothing replaces it.
What follows is not dissatisfaction. It is the absence of a reason to stay engaged. The client is not unhappy; they simply have no live question. And a relationship with no live question is one a competitor can open with a single good idea.
Three things that change the curve
Re-plan on a schedule, not on an event. Most partners revisit a plan when something happens — a market move, a life change, an inbound call. That makes the review reactive, and it arrives after the client has already started wondering. A calendared annual re-plan, even a short one, resets the question.
Widen the mandate before you need to. A client whose entire relationship is one product line has one reason to stay. The firms with the lowest third-year attrition are not the ones with the best returns; they are the ones holding two or three mandates per household by the end of year two.
Make the second goal explicit. When the first goal is funded, say so — and then ask what the next one is. It sounds obvious. It is also the conversation most often skipped, because finishing a goal feels like a success rather than a risk.
What this means for how you staff
If attrition is concentrated in year three, then servicing capacity is mispriced when it is allocated by assets alone. The clients who need contact are not always the largest; they are the ones whose original problem has been solved. Segmenting a book by tenure alongside size tends to surface a different list than either does on its own.
None of this is expensive. It is mostly a scheduling decision, and the firms that make it deliberately keep clients for materially longer.