October 22, 2011


advisor and client?Wealthy clients keep getting interviewed about what they want from their advisors and aren't getting. The advisors keep getting reminded but do they change?

Survey Says

The ideal advisor ...
  • discloses fees: 94%
  • understands your life and financial goals: 94%
  • engages in open and honest dialogue: 84%
  • has professional designations: 77%
You probably agree. These findings are from a new informal survey of 40 wealthy investors. The results may also apply to other types of advisors.

The most interesting results are quotes from the participants. We’ll look at the main issues raised


If your advisor is focused on making money today, you won't get much attention unless you're buying now. Your past purchases won’t entitle you to ongoing service or attention. That’s short-sighted but does happen.

Here are quotes from the survey
  • "He doesn't take the time to explain things thoroughly" [expedient; may not know how]
  • "He provides responses that I think are general to his client list" [cheaper than personalized attention; the responses might be prepared by the advisor’s firm, which makes them even more generic]
  • "There's not enough contact." [cheaper to ignore those who aren't buying]
  • "There's lack of communication." [cheaper, may lack communication skills. especially when writing]
  • "I'm just a number [to my advisor]" [and that’s not Number One]
  • "She acts like she has no time for me" [why are you paying her?]
  • "She doesn't get back to me when I have a question" [why are you paying her?]
If you get more service at Starbucks, you’ve got a problem with your advisor. You are paying your advisor directly or through hidden fees. You deserve to get what you’re paying to get.


Advisors can be salesy because they are typically paid based on what they sell
  • "I get too many emails" [This comment may mean too many messages of the wrong type. If your advisor uses social media, you decide what you want to receive and how often.]
  • "There's a conflict of interest between how they are paid versus my best interest (life stage, fit, superiority of product, personalized to my needs, etc)" [why do you tolerate this?]
Be alert for hints of conflict of interest. More revenue for your advisor means less benefits for you. Advisors are not fiduciaries required to put you first.


  • "I'm not able to reach him in difficult times" [why do you tolerate this?]
  • "He may retire before I am finished with his services" [You’re paying but your advisor decides how long to keep you? That’s backwards.]
If your advisor shows no concern for your future well-being are they treating you well today? Like everyone else, advisors do retire, get sick, die and get disabled. A well-run practice will have plans in place for these contingencies.


More quotes
  • "He doesn't learn from mistakes"
  • "He justifies his actions as "unforeseen events""
You’ll easily find advisors who are slow to learn and quick to shift blame for bad news. By staying and paying, you are condoning their actions. Maybe you’re not learning. There may be a gap in your expectations and what your advisor can realistically deliver. That’s a communication problem.


"He does not always speak in layman's terms."
You'd expect communication to be a core skill, especially when Canadians suffer from innumeracy (financial illiteracy). Skills vary. Some advisors seem brilliant ... but are difficult to understand. Some are clear but … have nothing to say. Practice helps both extremes.

Advisors can hone their communication skills from listening to writing to speaking at Toastmasters. That's an ideal environment to get feedback on the clarity of their messages.

Communicating clearly takes more skill. The first step is having a detailed understanding and the next is to simplify. Do you recall The Seven Habits of Highly Effective People by Stephen Covey? That's the second half of 5th habit: seek first to understand then to be understood.


You'd hope that advisors understand you. That's the first half of 5th habit: seek first to understand then to be understood.

If you aren’t confident that your advisor understands you, how can they truly help you. There are oodles of advisors but only one you. They need you more than you need them.

We've discussed advisors before. The simple answer is that the ideal advisor has three elements: chemistry, credentials and generosity. What do you think?


Podcast 140 (6:25)

direct download | Internet Archive page | iTunes

PS Advisors would serve you better if they read the Seven Habits and applied them.

1 comment:

Anonymous said...

This is such a helpful article. I'm not sure that most people have any idea about how their advisors are paid. Many of us struggle with being in the driver's seat as clients.

Had a discussion with a family member this week about the topic. She's not happy and blames the financial institution. She doesn't accept that she is hiring and paying this advisor and has the power and responsibility to walk away and hire someone else.

Clients shy away from fee-for-service advice and hidden fees foster the illusion that they are getting unlimited service for free. Would it help for advisors to define the relationship early on with a set of deliverables that their clients can expect of them and to define the level of business required for each level of service?

I would agree with your point about chemistry, credentials and generosity - I would say, however, that it is frequently a somewhat arbitrary decision that the average person makes when he/she chooses an advisor and that chemistry and generosity are often only revealed later in the relationship.

As for credentials, I think literacy is a problem here - it's not easy to decipher what all the different letters mean and advisors tend to confuse the issue by including irrelevant suffixes like a university BA degree (I assume anyone advising has already attained a basic level of post-secondary education.)

Christina @GPtekkie