When Centers-Of-Influence Think They Are Investing Experts

When Centers-Of-Influence Think They Are Investing Experts
Image source: Pixabay

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,

Gates Capital Management Reduces Risk After Rare Down Year [Exclusive]

Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More

Lately we have been dealing with a couple of clients who are aligning themselves with outside advisors (centers-of-influence, e.g. attorneys and accountants) whom we find very difficult. The issue isn’t personality; it’s deeper than that. These advisors have an opinion about everything we do. They are not investment experts but they ask questions of their client and then the client in turn asks us. This is very divisive.

We have always approached other advisors as partners in a team working on behalf of the client. Even if I would not personally choose someone, I’m not going to question my client’s decision. I am going to work on their behalf.

Is there a way I can politely point out to my client that their accountant, for example, is not an investment expert and that we have the credentials and the experience to make our own decisions?

Gerry S.

Dear Gerry,

Your experience is not an uncommon one. Unfortunately there is so much information available on how to invest or create a financial plan that too many people think they know enough to have a perspective! Conversely, tax law and legal documents are so convoluted that few people would claim any knowledge of how they operate.

As we know, having access to information and being an expert are too vastly different things.

Your concern could stem from one of three things – the other trusted advisor is diminishing the value you add and perhaps planting seeds that your mutual client is overpaying for your services, or your client will no longer need your services because they can get advice from their accountant, or the client will lose trust and go someplace else. These are all real threats in a situation such as you describe.

The problem when someone is unjustly attacking you is that if you respond with anger, or irritation or you try and point out the error of the other advisor’s way in any overt fashion, you will look like “the bad guy.” This is the unfortunate case with many things and why the quote, “the lady doth protest too much, me thinks” (from Shakespeare’s Hamlet, c. 1600) is often used when we try and argue or push back too much on something. If you try and convey too directly why the other advisor is wrong, it could cement the idea you are doing something wrong or hiding something.

Instead, whenever under attack, I prefer using (a) the questioning route, and (b) the “elephant in the room” approach. These involve pointing out what’s happening in an objective way (elephant in the room), “Mr. or Ms. Client, this is the third time you have asked me about our investment decisions based on something your accountant said, and it is concerning me. I wasn’t aware they had financial experts in their practice.” Next you follow it up with a question, “In fact, I’m a bit curious about why they are raising these issues. Should I be concerned about how confident you are right now in our approach?” Or, “Can you help me understand exactly the nature of your concerns?” You might want to offer to sit down with the client and their accountant/attorney to go through your approach and how you are investing on behalf of this client. You definitely want to do a refresh with your client so they are armed with information about what you do and how you do it.

Staying calm and objective, and raising a concern in a more inquisitive way is often going to be your best approach in a case like this.

By Beverly Flaxington, read the full article here.

The Advisory Profession’s Best Web Sites by Bob Veres His firm has created more than 2,000 websites for financial advisors. Bart Wisniowski, founder and CEO of Advisor Websites, has the best seat in the house to watch the rapidly evolving state-of-the-art in website design and feature sets in this age of social media, video blogs and smartphones. In a recent interview, Wisniowski not only talked about the latest developments and trends that he’s seeing; he also identified some of the advisory profession’s most interesting and creative websites.
Previous article Verint Systems VRNT Short Thesis
Next article Teen Dream Jobs Vs American Workforce Realities [INFOGRAPHIIC]

No posts to display