What clients think

Learn to stand above the crowd of financial advisors.

Written by Tim Fortier

Tim Fortier is a Quantitative Model Developer and Portfolio Manager specializing in rules-based investment strategies. He has over 30 years of experience within the financial service industry.

July 20, 2019

So in my previous post, I shared with you the concept of Authority and what it means.  And in the post, I promised you that I would share the results of a recent investor survey.  

A few years ago I became friends with someone who is a self-made millionaire and who does financial coaching. He also writes on various topics of personal finance and his articles have appeared in almost every major publication including The Wall Street Journal, Investors Business Daily, Huffington Post, and Marketwatch to name a few.  

With a following of over 55,000 subscribers of his newsletter he recently asked this group one question…

“What do you least like about your financial advisor?”  

You can download the full survey results here which includes over sixty of the most common responses.

Generally, the responses can be grouped into the following categories:

  • Conflicts of interests and trust
  • Fees
  • Information overwhelm
  • Confusion
  • A desire for better instruction
  • Returns and risks

Every financial advisor reading this should download this report. The information it provides is invaluable.

Here is a sampling of the responses:

  • Don’t know who to believe.
  • They have a vested interest in the advice they are recommending, which is not always disclosed.
  • Most advisors are poorly trained, motivated by self-interest, and have a CYA mentality that is so ingrained they can’t possibly provide any real advice – even if they could – for fear of being held liable for anything they say.
  • They never tell you when to sell.
  • I don’t want to give up my hard-earned investment returns in fees.
  • Hard to sort good information from all the noise.
  • They all give the same advice – like machines. You walk in and they ask (fill out a form) for your risk tolerance and then they divide your assets into each group to diversify.
  • The unpredictability of it all is paralyzing.
  • Want a clear, step by step template of what to do when investing your money.
  • Frustrated by mediocre returns
  • Risk of the stock market is not understood by anyone as far as I can tell (Black Swans, etc.)



Did any of the answers strike a nerve?  

I think almost everyone reading this would agree that some of the things that are pet peeves to clients are in fact often “standard operating procedures”…meaning that as an industry, we need to listen to our clients and start doing things differently.  

Let’s take the standardized “risk questionnaire” that often results in the all too standardized “ideal optimized portfolio”.   As can be seen, by the survey results, investors are not recognizing the value in this. That is the reason that robo brokers such as Wealthfront and Betterment have gathered over $440 billion in assets under management. 

Forget what you think…what matters is what investors think….so unless you have a way to differentiate yourself beyond these common practices that are now becoming automated….you are dead or dying.  

Now please understand….I am no fan of most robos….in fact I think at 25bps they are overcharging because they offer ZERO VALUE.  None. Nada. And this is just my opinion, but I think many of the clients of robo brokers are going to end up massively disappointed by the results.  Massively.   

What is NOT being explained to the clients of robos are the assumptions being made and the potential risks. Let’s face it. There is really nothing “modern” about most of the allocations being used by the various robos. At the end of the day, most robo allocations are not that different from target-date funds.

And in 2008, according to Ibbotson Associates, not a single target-date fund posted a positive number and the average loss was nearly -18% and the largest loss was -44.5%.

Diversification by itself is not sufficient to mitigate the kinds of market losses we witnessed in 2008-2009 but that is another topic for another day.

In an upcoming post I will tell you exactly how to make the topic of robo brokers DOA so that if a client or prospect ever brings it up…you will know exactly how to handle it….in fact, what I am going to share will differentiate you from just about every other advisor as well.

So back to the survey.   Now that you know what irks your clients…you now know what you need to stop doing IMMEDIATELY.  Just as importantly…you also now know how you can exceed the expectations of your clients.  

Because every one of those complaints can be turned into an opportunity to do things differently…to do things in such a way that it exceeds the expectation of your clients…and by doing so….you will begin to differentiate yourself and command Authority….which is what we are after.

Make sense?  The list is gold if you know what to do with it.  

Ok…So here is your homework assignment between now and the next time we connect.  First, go back and review every item on the survey list and if you find yourself doing any of the things that cause frustration for a client, STOP doing it. 

Second, the list contains several ideas where a financial advisor could add tremendous value.  One thing I noticed is that there were several requests to make things simple…to have someone help cut through the confusion and noise.  That says first, that they have not yet found a person that has done that for them….and two…it says that could be a powerful marketing message.   (More on marketing in our next several posts)   

Finally…take some time and reflect “on” your business.  This is a trick I learned from Michael Gerber’s E-Myth, a book I highly recommend.   Force yourself to look at your business from the outside looking in.  

I will go into this in much greater detail in a future post when I share one of the smartest things I ever did….but for now….ask yourself…does this business (your business) reflect everything that you want it to be?  What would a client see? Is there a gap between what you want your business to look like and where it is today? If so…that gap defines the work still to be done. For now, just make a note of it. I don’t want to get too ahead of myself.

Talk soon.

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