Financial Advisors – Not A Planner And Proud Of It!

August 9, 2016

by Beverly Flaxington

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,

I entered the investment industry almost 28 years ago because I am fond of investing and good at what I do. My clients come to me because they need good investment advice, not because they need a therapist. I am not interested in being their confidant or understanding all of their issues, personal or otherwise, and I do not see a need for this. One of my investment managers has been pushing us to be better planners. This includes having all kinds of personal questionnaires to cover with clients. This seems strange to me – to ask existing clients I have known for years very personal questions that I have not asked before. Is this really a necessary transition? My clients are loyal and seemingly very happy.

Mark P.

Dear Mark,

This is a very loaded question, and there are a number of responses. First, as I have said in previous columns, there are many ways to be “in” the financial advisory or wealth management business. Not all financial advisors are planners. Some are excellent investment managers, and that’s what their clients hire them to do. What’s important is to be clear about what you d , who you do it for and why it is important or better or different from what clients could get elsewhere. Your market may well be one where investors are coming to you purely for your investment expertise, and that could be fine. Carving out a niche, defining it and being clear about it is my first piece of advice.

Next, you do want to consider the request coming from one of your team members. If this person is valuable to you, and more robust planning is important to them, is it worth letting that person or others in your firm offer some enhanced services? Could they work with their clients in a different way without cannibalizing your overall brand? I’ve seen many firms where advisors have their own unique approach in working with clients, although the underlying investment philosophy remains the same.

The last thing I would ask you to consider is whether your clients might actually benefit from having you ask more questions about what they care about and why. If you have been doing this for almost 30 years, some of your clients may be older and possibly facing retirement or passing their legacy on to children or grandchildren. They may have philanthropic interests or worry about longer term medical costs. I don’t know the specifics of your client base, so this may not be accurate but it would be unusual if no one you are currently working with had issues or concerns outside of how their portfolio is allocated. You might try broaching this with a client who could be open to a discussion to see if they are receptive. Again, as with your team member who wants to engage differently, not all clients may respond to it. But if a few of them do, you will have learned more about them, and more information is usually only helpful, not hurtful when it comes to personal or family finances.

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