There I was feeling a bit sorry for myself
after a conversation with friends over their disillusionment with financial
advisers and lo and behold, the day after, there in black and white in an
article on perceived ethics and honesty of various professions, my suspicions were
confirmed.
Only 25% of people believe financial
planners are ethical and honest. Above car salesman, State MP’s and talk back
radio announcers but way below nurses, teachers and engineers. Sheesh, even lawyers
clocked up 36%!
Am I surprised? Not particularly. Most
people I meet can rattle off a bad financial adviser story quicker than you can
say Storm Financial. But it’s just so…disappointing.
The Future
of Financial Advice (or FOFA for those in the know) reforms the government
has legislated will go a significant way towards enforcing advisers’ fiduciary
duties and improving transparency of fee arrangements, but work on the soft
skills of both adviser and client might make some difference to the bad rep financial
advisers have in our community.
The relationship with your financial
adviser is no different from any other intimate relationship you have. Hell,
most of them know more about your personal and financial situation than friends
or family.
At a core level, it’s two human beings
interacting and making decisions to help reach your financial goals. Both
parties bring differing perceptions, needs and personality styles to the table
during the course of the relationship.
The reality is that we only control our side of the interactions. Before
blaming others for a relationship’s deterioration, shine a light on our own
behaviour.
So, today, I give you my 3 Essential Skills to Improve Your
Relationship with Your Financial Adviser.
- Set Expectations
Spell out what you want and expect from the
adviser-client relationship.
As a legal requirement you will receive a Statement of Advice detailing your
current circumstances, goals and the plan the adviser has put together to
achieve those goals. Don’t just file it away never to be looked at again. Go
over it until you are clear what you are signing up for.
Even if you end up sounding like the
proverbial broken record restate your understanding of the arrangement. For
example, “So, for x amount of dollars invested I will be paying x amount of
fees and for those fees I will be entitled to an annual and semi annual review and
am able to call you on issues as they arise”.
- Develop Empathy
It’s intriguing to me that some people have
few qualms about spending money on say, a massage for an hour for $150, but
charge people that rate per hour for time spent on the highly important area of
say, YOUR FINANCIAL FUTURE and it’s all resentful mutterings under the breath.
Appreciate that financial advice takes time
and costs money. There is time spent on formulating advice beyond what is talked
about in client meetings plus time to complete administration and requisite
paperwork. The person providing advice is a qualified individual who is
entitled to charge for their time.
Also, believe it or not, the blame for the
world’s financial crises (and hence the poor performance of your portfolio)
cannot all be laid at the feet of your adviser. Work out what is and is not
under your adviser’s responsibility and control. Focus on what is.
- Fight Fair!
All relationships need both parties to
develop conflict resolution skills. Don’t seethe and whinge behind people’s
backs when things aren’t proceeding as you understood them. Contact the adviser
and state your concerns giving them time to respond. Be polite and don’t make
it personal. Use lots of “I” statements not the resentment inducing “You always…”
or “You never…”
If that is not resolving the issue to your
satisfaction move on to…
Escalation.
Make contact with that adviser’s superior
and again, calmly and politely spell out the issues.
Failing that, vote with your feet and move
on. Exhaust all the avenues before you reach that point but be prepared to walk
away.
Don’t worry if you are feeling I have been
one-sided in my expectations. I have a whole separate list of tips for advisers
to take heed of for another day. Just for now let’s talk about what we can do to make a difference in the
battle to improve the pervasive low respect for financial advisers that exists
in our community.
