Why Clients Mis­trust Ad­vi­sors

Has suc­cess made you com­pla­cent? You may have picked up some bad habits over the years. Here’s what to do about it.

Financial Planning - - CONTENT - By Al­lan Boomer

Has suc­cess made you com­pla­cent? You may have picked up some bad habits over the years.

IN GEN­ERAL, FI­NAN­CIAL PLAN­NERS DO NOT HAVE the best rep­u­ta­tion. I should know — I’ve been work­ing in the in­dus­try for the past 20 years.

I have been to cock­tail par­ties where peo­ple walk away the mo­ment they hear that I’m a fi­nan­cial ad­vi­sor. But why? And what should we do about it?

About three years ago, I re­cruited an ad­vi­sor who came from the en­ter­tain­ment in­dus­try. Not only was she from out­side our sec­tor, she’s also a mil­len­nial.

Although it was my job to train her, I wound up learn­ing a lot my­self. She brought a fresh set of eyes to my busi­ness and our en­tire in­dus­try that I found both help­ful and un­com­fort­able. In the end, her feed­back on the things clients prob­a­bly hate about us have helped im­prove my prac­tice.


The first thing I learned is that we need to im­prove our com­mu­ni­ca­tion skills. Many of us are not good lis­ten­ers — present com­pany in­cluded. At best, we are se­lec­tive about what we hear. At worst, we miss key facts about our clients’ per­son­al­i­ties and fam­ily dy­nam­ics that may well leave them feel­ing misun­der­stood.

Next, we de­fault to jar­gon and fi­nan­cial speak that we think makes us look smart, rather than tak­ing the time to re­ally ex­plain con­cepts at a ba­sic level that a client can grasp.

In ad­di­tion, we are not good at an­swer­ing ques­tions. We spend a lot of time hedg­ing our re­sponses out of fear of be­ing taken too lit­er­ally.

Some of us think or act as though we are much more in­tel­li­gent than our clients. When they sug­gest things they want to do with their money, we of­ten steer them away or dis­miss their ideas as too risky. I have even seen ad­vi­sors cal­lously make fun of clients be­hind their backs.

We may know more about fi­nan­cial mar­kets than they do, but many of our clients are suc­cess­ful in their own right. They ex­cel in their ca­reers, run busi­nesses and have good ideas — if only we take the time to lis­ten to them.

Ad­vi­sors are not al­ways open­minded about change. We in­vest in the same things we have al­ways fol­lowed. We aren’t al­ways proac­tive about learn­ing about re­cent in­no­va­tions or about adapt­ing to them.

How many times has your client asked about such things as cryp­tocur­rency, blockchain, robo ad­vi­sors, so­cially re­spon­si­ble in­vest­ing, ven­ture cap­i­tal or mar­i­juana? How of­ten have we replied with one-lin­ers like, “It’s too risky,” or “I don’t un­der­stand it?”

Our in­dus­try is too ho­moge­nous. Think back to the last time you walked into a whole­saler lun­cheon — there was prob­a­bly not much diver­sity in terms of age, gen­der and eth­nic­ity. We all sound and look alike.

But we can learn some­thing from peo­ple who look dif­fer­ent from the pro­to­typ­i­cal ad­vi­sor. Women, mil­len­ni­als and mi­nori­ties are un­der­served by the wealth man­age­ment in­dus­try when there is a dearth of ad­vi­sors who fall into th­ese cat­e­gories.

Last, we don’t present our­selves or our ideas very well. My new ad­vi­sor’s for­mer in­dus­try is one where ap­pear­ance and pre­sen­ta­tion are para­mount. Most me­dia and en­ter­tain­ment ex­ec­u­tives con­vey so­phis­ti­ca­tion by wear­ing clothes

with a cus­tom fit, and up­dat­ing their wardrobes reg­u­larly. In terms of pre­sen­ta­tion ma­te­ri­als, the en­ter­tain­ment in­dus­try is light-years ahead. Pre­sen­ta­tion books are vis­ually and aes­thet­i­cally pleas­ing. There is brand con­sis­tency and at­ten­tion to de­tail on small things like fonts and col­ors, not just ty­pos.

What’s the so­lu­tion?

Com­mu­ni­ca­tion: Con­sider bring­ing some­one else to client meet­ings to be a sec­ond set of ears — per­haps some­one ju­nior at your firm. Ex­change notes with them af­ter­ward to an­a­lyze what was re­ally said.

Write things down — es­pe­cially spe­cific phrases used by your client. What were they re­ally say­ing? Or ask­ing? Drop the fi­nance­s­peak — re­move all acronyms from your lex­i­con un­less you de­fine them.

Open-mind­ed­ness: The next time your client has an idea, re­search if it’s fea­si­ble and in­ves­ti­gate ways to im­ple­ment it, in­stead of im­me­di­ately dis­miss­ing it.

As­sume the clients are go­ing to im­ple­ment the idea with or with­out your help. Think of ways to help pro­tect them.

Diver­sity: Men­tor some­one whose back­ground is dif­fer­ent from yours. Bring on an in­tern this sum­mer and teach him or her about more than cold calling and lowlevel administrative work.

Hire a mil­len­nial and pre­pare your­self to be open to a two-way ex­change of in­for­ma­tion.

Ap­pear­ance: If you are still wear­ing a suit that is more than 10 years old, it may be time to up­grade your wardrobe by hir­ing a tai­lor or stylist. Also, hire a de­sign com­pany and up­date your mar­ket­ing ma­te­ri­als and client re­view books.

In sum­mary, many of us have been rest­ing on our lau­rels. Frothy stock mar­kets have made us too com­fort­able. Our jobs have been ex­tremely easy in re­cent years.

News flash: Com­pe­ti­tion is com­ing. Whether it’s robo ad­vi­sors dis­rupt­ing our in­dus­try and driv­ing our profit mar­gins lower, or mil­len­ni­als who aim to do busi­ness dif­fer­ently. We should all em­brace the con­cept of con­tin­u­ous im­prove­ment.

If we want our clients to love us, we have to do more than just de­liver re­turns. We have to lis­ten bet­ter, present our­selves bet­ter, step out­side of our com­fort zones, and find bet­ter ways to con­nect with our clients.

If our clients feel unim­por­tant and misun­der­stood, per­haps that robo ad­vi­sor will seem like a more at­trac­tive op­tion.

If you are still wear­ing a suit that is more than 10 years old, it may be time to up­grade your wardrobe by hir­ing a tai­lor or stylist.

Al­lan Boomer con­fesses that, de­spite his 20 years of ex­pe­ri­ence, a newly hired ad­vi­sor from an­other in­dus­try helped him spot short­com­ings at his own firm and the en­tire in­dus­try.


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