Fielding Complaints About Fees

July 1, 2014

by Beverly Flaxington

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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Dear Bev,

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.

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