Everyone makes mistakes—even advisors. But sometimes the worst blunders can become highly valuable lessons.
Financial Advisor asked veteran advisors about their past errors and what those slip-ups ultimately taught them.
Don’t Sell Yourself Short
Answers were widespread and diverse, but one key theme that emerged was don’t sell yourself short.
“The biggest mistake I made was to cave into clients’ every whim and wish, all in the name of providing exquisite customer service—and let the client unknowingly take themselves down the wrong investment path,” said DeHaven Becker at Harmony Private Wealth, Steward Partners Global Advisory in Fort Collins, Colo.
Laraine Dickerson at Canvas Advisors in Englewood, Colo., has a similar tale. Her biggest regret was “undervaluing my time,” she said. “I used to bend over backwards to meet each prospect’s expectations, no matter how unreasonable.”
As her business grew, though, she came to see the error of her ways. “Retraining clients and prospects to more standard service expectations is much harder than knowing what you have to offer is valuable and setting reasonable expectations upfront,” she said.
Never Accept Less Than You’re Worth
Kimberly Foss at Mercer Advisors in Roseville, Calif., recalled a foolish offer she made early in her career. She was trying to help a friend of one of her clients who supposedly “just needed a little help,” said Foss.
But the friend did not have the minimum in investable assets (which was $1 million at that time) and asked for a fee discount. Foss agreed to help out.
That was just the beginning of the troubles. The new client proved to be “exceptionally needy, demanding my time and attention out of all proportion to the value of the account.”
In the end, they had to go their separate ways.
The lesson learned: “We should never accept less than we believe we are worth,” said Foss. “Understand your value, set your fee, and insist upon it.” Taking less, she added, can “slowly erode both the dependability of your practice’s potential revenue and your credibility as an advisor.”
Be Prepared
Young advisors should also not ignore the value of education and accreditation. Erin Wood at Carson Group in Omaha, Neb., shared that when she was starting out she was told to wait to get her CFP designation.
“I waited five years to begin taking the classes,” she said.
In those classes, she kept realizing how inadequate some of her client service had been up to that point. “I kept finding areas where I could have done better,” she said.
No huge goofs, fortunately, but she had neglected to present clients with certain appropriate options simply because she hadn’t known they existed. Being well-versed in all client options is vital, she said.
In the same vein, Darla Kashian at RBC Wealth Management in Minneapolis learned early in her career the error of being unprepared.
“I managed the assets of a small foundation,” she recalled, “and while I came prepared to quarterly meetings with financial reports, I seemed less prepared for the Q&A portion of the meeting.”
From that experience, she learned to always have ready a “written narrative anticipating questions,” she said, rather than trying to answer them on the fly.
Listen With An Open Mind
Chris Marsico at Rossby Financial in Saxonburg, Pa., told of a meeting with a prospective client who “came from a good connection.” Marsico had been told that the prospect was looking for a specific investment product. It sounded easy.
“I went into the meeting confident and ready to talk about that specific product,” he said. “I was so confident that I didn’t even ask the prospect many questions. I thought I already knew what he wanted.”
He lost the client—but learned the importance of two-way communication. “In order to make it as a strong advisor, listening is a skill you must hone,” he said.