More than likely, that answer is no. Mutual trust between planner and client is imperative for a successful relationship. This applies to other relationships as well. Husband and Wife, Physician and Patient, Coach and Player just to name a few. Sadly, the trust is almost always “implied” and never confirmed through open, two-way communication between the parties involved. Sometimes, as a result, the relationship fails.
When we initially meet with a prospective client, we try to ask questions that at first, may appear overly direct and difficult. To avoid any surprises or anxiety, we inform the client prior to the questioning that the upcoming inquiries will be direct. First and foremost, we communicate to the prospect that in order to have a successful long-term relationship, it is imperative that we work consistently to establish mutual trust. To do that, we require open, candid and truthful communication as a pre-requisite for all clients. Such as, “Specifically speaking, why did you leave your last advisor?” “What are the qualities that you consider paramount for your financial advisor to have?” “What specific type of communication do you prefer when exchanging information with your advisor?” “How do you feel about paying a quarterly fee to have your money managed?” These “introductory” inquiries can shed light onto basic requirement and expectations that the client has of his or her advisor. We may also ask the client for his or her opinion of discretionary trading, as well as other broker-dealer relationships that they intend on keeping….and why.
We then allow the client to ask any questions relating to the advisor, fees, support staff, investment philosophy, or any other concerns that the client may have.
Moving from personal and philosophical dialogue to more planning-oriented questions; we will discuss “retirement-oriented” concerns, risk tolerance, portfolio allocation, sector preferences, insurance coverages and immediate and long-term cash flow needs. Each of these questions will hopefully prompt the client to address each topic in more detail. We continually circle back to discuss trust as it relates to these subject matters.
We’ve discovered through the years that the more we know about our clients overall personal, professional and financial situation; the better prepared we are to work with them effectively. In turn, we’ve found that the more that they know about our practice and beliefs; the better prepared they are to work with us.
Trust continues to be the common denominator as it relates to Advisor-Client long term success. Frankly, we don’t anticipate that changing.
**Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Opinions expressed are those of the author and not necessarily those of Raymond James. Past performance may not be indicative of future performance.
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