DEALING WITH CLIENTS WHO DON’T LISTEN
Stakes for you — and your adviser — are too high to not follow her advice
I’m on the outside now.
But when I was on the inside of the financial planning industry, one particular dynamic made my job unexpectedly harrowing. And now that I’m on the outside, I often talk to financial advisers and other financial professionals who find themselves compromised by the same phenomenon that used to drive me crazy. It’s so dangerous and counterproductive that no one benefits from this common reality: clients who don’t listen.
The stakes are too high for both you and your adviser to not follow financial advice.
As a point of distinction, it’s important you understand I’m not necessarily talking about what to invest in, rather how much to invest and how to execute your financial plan in general.
The role of your financial adviser is to listen to your goals, translate them into a financial strategy and then provide you with the steps necessary to achieve them. But this is where the crickets can start chirping.
If you don’t execute the plan given to you, then you will fail. At that point, you’re the only person to blame. Yet advisers are often the people with fingers pointed at them and their reputations on the line.
Think how different this is compared to a trip to the dentist. Every time I go to my dentist, he tells me to floss. Every time I offer a forced smile and nod. He gives me floss. I take it home and place it in my floss drawer. I have approximately 500 unopened containers of dental floss in my floss drawer. Under no circumstances is he to blame. My dental crimes are my own.
However, with financial advice and financial advisers, there’s a lot more at stake than hygiene. If you don’t listen to your adviser, you run the risk of failing at the hardest game in town — creating financial independence. This means working longer (if not indefinitely), settling for less and creating oodles of crippling financial stress.
When your adviser says your goals need $500 a month or $150 a month or $273.76 a month, then send in the money or change your goals. And if you aren’t willing to feed your goals, stop wasting your money on financial advice.
The fact is, clients get distracted by the market and returns, which causes them to ignore their role in fueling the fire. It never ceases to amaze me how much more attention is paid to what to invest in, versus how much money should be invested. The result is every retirement readiness statistic produced. I’m not lamenting your right to do what you want or don’t want to do; if you don’t fund your goals properly, you will fail every time.
I want you to get the most out of your relationship with your financial adviser. You’re paying for it. Just understand, it behooves you to be a good client and follow through on the advice you are given.
I can’t imagine a more important professional relationship than the one you have with your financial adviser. If you find yourself a trustworthy adviser and put your faith and energy into the relationship, then you will benefit greatly. If you don’t, the equation breaks down completely.
You can do yourself a huge favor with your financial adviser by taking them a thorough set of financial goals. Talk through the goals and then allow the adviser to put a plan in place to help you achieve the goals. If your adviser happens to tell you that one of your goals is a bad goal, don’t get offended. Be glad. Save the “customer-is-always-right drama.” A great adviser will find a way to help you accomplish important goals and delicately dismiss counterproductive goals.
My feeling is that most relationships with financial advisers fail because measurable goals are neither set nor accomplished. If you’re sending your adviser a few hundred dollars per month with no specific goal, then everyone is worse for it.
Be sure to put in the leg work from the beginning, by giving both you and your adviser a target to aim for. And above all else, act on your plan. Peter Dunn is an author, speaker and radio host, and he has a free podcast: Million Dollar Plan. Have a question? Email him at AskPete@petetheplanner.com.
If you don’t listen to your adviser, you run the risk of failing at the hardest game in town: creating financial independence.