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Financial Planning > Charitable Giving

When Advisors Get Jilted

By Staff Writer

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Is it more valuable for financial advisors to know whether their clients are happy or unhappy with their services?

While a case could be made for the happy knowledge, I think that knowing what youre doing that might cause clients to up and leave you is much more important to know. Chances are that if youre perceived as doing something disagreeable in one clients eyes, there are other clients who see you in the same jaundiced way.

If youve been following Walt Zultowskis series on attitudes of the high net worth marketthe first two parts of which appeared in the July 19 and Aug. 9 issuesyouve got a pretty good idea of the reasons that high net worth clients are seeking a new primary advisor.

Walts company, The Phoenix Companies, did its 5th Phoenix Wealth Survey this year. The accumulation of the survey results over the years, with their different nuances and changes in attitude, is establishing a valuable track record of this much-desired markets thinking.

This years survey has some interesting results for advisors to chew on. While about a third of responses did indicate dissatisfaction regarding an advisors investment strategies or less-than-expected returns, these percentages were lower than those recorded in the 2002 and 2003 surveys. This may be a case of clients realizing that an ebbing tide (a bear market) grounds all boats, just as a rising tide (a bull market) lifts all boats.

Some of the responses that showed dissatisfaction had to do more with things that were in the advisors control. For instance, almost as many responses (32%) said the advisor was not proactive in maintaining contact as did those who said they did not like the advisors advice (34%).

The prescription for remedying this perceived flaw is not exactly rocket science. Pick up the phone! Send an e-mail! Drop the client a line!

This is especially so if there is bad news to deliver. Clients are going to find out sooner or later, so it is much better for the advisor to own up and deliver the news than to be caught out and perceived as some slithering creature who wants to stay out of sight until the storm passes over.

A good percentage (31%) said fees were too expensive. This, of course, is in the eye of the beholder and if the advisor feels his or her fees are fair for service delivered, then a parting of the ways may be inevitable. But once again, knowing this can spur the advisor to take actions that show the fees are justified.

Another interesting aspect of the studyand one which shows advisors where there may be pockets of opportunity with the high net worth marketwas where respondents indicated areas in which they were not receiving advice from their primary financial advisor.

Thirty-six percent said they were not getting financial planning advice; 42%, not getting retirement planning advice; 63%, no estate planning advice; 79%, no life insurance planning advice; and 85%, no charitable strategies advice.

Whew! Am I missing something here, or do these no-advice areas seem to be very basic to the financial advisory process? It makes you wonder in what areas clients are getting advice. It also becomes clearer why many say fees are too high.

Perhaps the greatest value of the survey, however, is that it forces advisors to deal with the fact that the client-advisor relationship should not be taken for granted. Stress can damage or end it.

If some of your clients have been checking out, then its probably time for some candid self-reflection, not the “mirror, mirror on the wall” variety.

Steve Piontek

Editor-in-Chief

Reproduced from National Underwriter Edition, August 12, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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