The Client/Advisor Interface

According to Peter Drucker, wrong answers seldom cause much harm; wrong questions can be devastating.

How does that affect clients?

The answer to that depends on the kind of relationship.

Some advisors use the eminence model of advising.  In that model the advisor instructs and the client acts according to the instructions.  Oh, and provides the resources to execute the instruction.  Some clients seem only to want “the answer” and this is often what they get.

Two hundred years ago, the priesthood was this way.  It has not ended well for them.  Parishioners can probably read and write now.  They have access to almost all information and have become less accepting of people who tell them what to do.  Unbalanced knowledge used to be common.

That same unbalanced knowledge is a sound argument for changing the financial advice regulatory environment.  Many advisors have authored their own regulatory problems.

Other advisors are the coach or the guide.  They see their function to be assistant planners.  To help with accumulation of information, assessment of risks and opportunities, analysis and help with the choices.

Tim O’Brien, a casualty insurance broker on Long Island, published an insightful piece recently.  Asking the Right Question.  That is an option that eminence advisors won’t understand or consider.  On the other hand the assistant planner wants to help the client make well-informed decisions, so they value clients asking questions.

Tim proposes several good questions in respect to coverage and options within that context.  Read his article.  His “right question” for a client to see what side of the interface the advisor may be on is this one, “Are there other questions I have not asked that could help you better assess my exposure to uncovered losses?”

I once saw perennial top-of-the -table advisor, the late David Cowper do something similar.  David was nothing if not well-prepared. He was presenting a significant case and had determined that there were six areas that could be of concern to the client.  He expected to have the client raise objections in each of them and prepared answers.

In the interview, the client raised four of them.  David’s response to each was prompt and professional, but what then?

“There are six areas where I thought you might value more detailed information.  Here are the other two questions you could have asked.”

Well-informed clients are good clients.  They do not need to know how to do it themselves; after all the field is mindlessly complex for the uninitiated, but they do need to know what is being done and generally how and why.  They should understand what their choices could be and their relative merits.

Well-informed clients participate. Active participation is always better than passive acceptance.


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

This entry was posted in Communication, Insight to Business, Personal Finance and tagged , , , , , . Bookmark the permalink.

One Response to The Client/Advisor Interface

  1. Wow — thank you for noticing my work Don! I only wish I had known to also offer Drucker’s prescient observation! Stay well and keep educating consumers !

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