Fielding Complaints About Fees

We are investment managers and believe in talking to our clients about the markets. I read a lot about how relationship building is the most important part of the business. But when it comes down to it, if we have a great relationship with clients but don’t make good investment decisions, we aren’t being fiduciaries. Clients hire us to invest – they can hire a therapist for the soft stuff. I would not expect you to agree given what you write about, but isn’t there a point to what I am saying?

Ron K.

Dear Ron,

Yes and no. I do agree with you completely on one point: Clients hire you to invest well on their behalf (or to create financial plans that they can use), and it is critical you possess the skill to do this. I would not want someone who is a licensed therapist, for example, to invest on my behalf — unless that person was also a financial planner. It’s a basic requirement for your profession that you understand financial matters and the markets. Some advisors are planning-focused, some are investment-focused and some do both. But ultimately, clients are coming because they want to entrust their financial well-being to a professional.

That said, money – for most of us – is the next most-intimate topic after our health and our children. And for some people, it may rate higher! It’s an emotional topic and a personal topic. I don’t see how you can learn about clients’ goals and help them navigate the financial issues in their lives without have a relationship with them. Many advisors who have backgrounds in psychology, therapy or social work tell me these views are invaluable, because they never know just what a client might bring up.

So I don’t believe financial management and relationship building are as inseparable as your note implies. I think one is the technical, required competence that is a must-have and the other is a people-focused orientation that is also a must-have.