Why You Want a Relationship with Your Financial Advisor

relationship with financial advisor

It’s no secret that over the past few decades the average person has changed the way they shop for everything from cars to groceries. The internet and other developments have made the process of doing product research and price comparison a simple and easy task where previously it required significant time and energy. This is mostly a good thing – customers are better informed and have eliminated numerous inefficiencies. Companies likewise have experienced a renaissance in how they sell, evident in the ubiquity of “no haggle pricing” and free online price quotes. Consumers have been effectively conditioned – do your own research, know what you need, find the cheapest price, and make the purchase quickly.

This new paradigm works great for most products. It isn’t difficult for an average person to understand the difference between two different pieces of clothing or furniture as the discrepancies are tangible and evident. Where the new way of doing things starts to drop off, however, is with respect to service providers. The reason being that in the case of most service providers you aren’t buying an object in isolation but rather into a relationship. The more important the service being provided the more intense the relationship.

Unfortunately, that desire to build strong relationships has dissipated on both sides of many service relationships – customers want everything better/faster/cheaper while service providers need to do more business in the same amount of time to offset the decreasing cost of their services. The result is an alarming trend in some of the most important areas of an individual’s life – healthcare, childcare, financial management, etc. – that lead to customers being treated more like transactions and less like people.

Why Financial Advisor Relationships are Important

A relatable analogy is a physician. The profession has a sacred trust in our society. Understandably so, as they are privy to personal and private information, trusted to make complex issues easier to understand so decisions can be made, and, on certain occasions, quite literally have your life in their hands. They are the ultimate service providers.

Now, let’s think about two different scenarios. The first is a doctor who takes your relationship seriously; reviewing your medical history before each appointment, striving to understand your current issues, and making informed recommendations and diagnoses. Conversely, the second doctor charges into the exam room 30 minutes after your appointment time, does not remember your last visit, did not look at your chart, and listens absent-mindedly to your issues while writing you a prescription on the way out the door. Maybe this doctor also reminds you to pay your co-pay on the way out.

Which doctor would you prefer? The first one who treated you like a person and valued your trust, or the second who treated you like a transaction? Who would you send your friends and family to? Who would you look forward to seeing again? While these are stereotypes and plenty of professionals inhabit the space between the extremes, the analogy is a poignant illustration created to make you think about how you want to be treated.

Select a Financial Advisor You Trust

In the context of financial services such as financial planning and investment management, the feeling of being valued may also be a problem. The last thing you should feel interacting with an advisor is that you are being treated like a transaction – like the biggest priority is just getting the job done and moving on to the next thing. You should feel the person on the other side of the table is attempting to understand you helping you understand them and developing a mutual respect and interest.

Your financial advisory relationships share many of the same considerations as your healthcare relationships – advisors know your private financial details, help simplify difficult concepts, and make informed recommendations based on your best interest. Because of those considerations, financial advisors have a responsibility to develop real relationships with their clients. It is one thing to understand a client’s financial position; that is mostly a function of reading statements. It is another thing entirely to understand how a client got to where they are, where they want to go in the future, and the WHY behind their decisions.

Communication is the Key to a Long-Term Relationship

As a healthcare patient, I would refuse to see a doctor who treated me like a transaction. My health and time are too important to be treated cavalierly by an individual whom I am trusting (and paying) to assist me in making challenging, potentially life altering decisions. As a financial advisor, I hold myself to that same standard – I assume my clients desire a meaningful and detailed relationship with someone genuinely interested in their well-being. I expect they treat their time and money with the same importance as they treat their health. If you have a financial advisor or are looking to use one for the first time, I encourage you to do the same. Make sure you are made to feel like more than an account balance and an annual performance report. Ask yourself who among your options is not only qualified but is someone you WANT to work with based on how you are treated. A mutual respect and trust are the keys to a long-term relationship – the kind you should want with your financial advisor.

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