I recall, quite vividly, the day, almost 20 years ago, that I first opted not to take on a client because his expectations of me were beyond what I could deliver. He was determined to work with a person who would tell him what he wanted to hear. In this business, there always seems to be someone that will promise to accommodate just about any client wish.
As the door latch clicked gently after he left, I did not feel good about the interaction. I was a little concerned about how I just passed up some new revenue, but I was more anxious that he would tell people I was incompetent and I worried even more about his future. Today, with a more mature business, a great pair of partners, an excellent staff, and some personal seasoning, I wouldn't have the slightest trepidation about making the same decision to pass. Now, I chuckle at the memory. Silly me, what was I worried about?
This is why I often recommend to new planners that as early as possible, give up the "anyone who fogs a mirror can be a client" approach. I did OK early on, but my career started picking up steam almost immediately after the encounter I just described. Coincidence? Maybe, maybe not. Correlation is not causation.
Turning away potential clients is far easier to say than to do. The crisis brought back many of the same anxieties I felt when I declined to work with the client I described. Several prospective clients wanted me to tell them I was the one with the working crystal ball or a magic wand and at times it was tempting to accept the role of the wizard.
I am not a wizard and I do not wish to live life pretending to be something I am not. I wonder if advisors genuinely believe alternatives will add value or are they just looking at these things to bring an air of sophistication to their offering? Do they think the client's resilience or patience with the markets is being tested so talking about something new will give clients the impression they are working harder for them? Are they putting alternatives into portfolios because clients "demand" them or are they going in because the home office is emphasizing the products?
Perspective
The biggest source of disappointment to me about the behavior of some advisors though is a lack of financial planning perspective. Despite all the talk and work in creating and developing the "financial planning profession," too often the planning process is still used to push product. Instead of taking the time to understand the big picture and seek out products that fit, the advisor seeks to fit product into the picture.
The salesman will try to make you feel good about whatever you request. That's fine for some types of stores but professionals should hold themselves to a higher standard. I see too many incidents where a client wants to do something that they really do not understand or could impede their ability to reach their goals or otherwise act against their interests. A professional will set them straight and advise them on better courses of action. You won't truly help them by just taking their order or pushing the latest and greatest trend.
Dan Moisand, CFP has been featured as one of the America's top independent financial advisors by most leading financial advisor publications. He has spoken to advisor groups on five continents on topics such as managing investments and navigating tax complexities for retirees, retirement readiness, and most topics relating to the development of the financial planning profession. He practices in Melbourne, FL. You can reach him at 253-5400 or [email protected]