The Client Advisor Interface

Learning, doing and understanding seldom happen together.  Because they do not, introspection, record-keeping and review are important parts of life.  Particularly in the financial parts of life.  Adversity triggers improvement.  Success validates tactics and strategy.

The relationship between client and financial advisor is not as complicated as many believe.  The client has a positive duty to establish strategy and provide resources.  The advisor has a positive duty to introduce and supply methods (tactics) to achieve the desired goals.  Then to help implement the methods chosen.

If you are your own advisor, then it will be difficult to carry out both parts.  It is beyond unlikely that knowledge of the available methods and implementation techniques are within one’s normal knowledge and skill set.  It is especially important to note that most of the tools, concepts and laws change frequently.  It is hard to keep up.

If you are assessing the need for an advisor, keep in mind the distinction between goals and methods.

While you are at it notice the need for record keeping, interpretation and understanding.  Objectivity is an uncommon human characteristic.  Some people think they have it, but under pressure it seems to disappear. Joe Louis and Mike Tyson are both attributed the same thought, “Everyone has a plan until they get hit.”  Most plans don’t have the getting hit part fully developed.

An advisor can help just by being not you.  Different experiences, different perspective, ability to compare to others in the same space, and deeper understanding all help assess the meaning of what is happening.  Meaning  matters and most individuals cannot assess meaning when they need it most.

If you are interviewing an advisor, ask about their reporting and assessment process. It must be a process.  Every quarter, or year, or decade, it does not matter.  Just so it is ongoing and attached tightly to the needs of the plan.  The purpose is to find early, the things that are going of track and revise them back to where they should be or to recognize that they will adjust themselves.

Next ask about how the educate their clients.  No client knows enough in the beginning.  All advisors should have a method to keep clients growing.  It could be as simple as emails with interesting articles to a website that includes relevant generic information, or to something as complex as a seminar series.  No client and no advisor is ever finished learning.

Finally, ask about ad hoc issues.  If you are not permitted to interact on demand, the relationship will be troublesome.  In the beginning the ad hoc material will be more common.  It is useful for the advisor because they can use it to discover shortfalls in their own methods or to find common interests to address in a website or newsletter.

The only easy clients are the ones who understand the process, its intended outcomes, and its limits.  Well-informed clients are good clients.


Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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