There are plenty of good folks serving as financial advisors, says Mark Roberts, ChFC, FIC, who has worked in the industry for more than two decades. But all too frequently, he says, the advice they provide may not truly be in the best interest of the client.
“Many of my colleagues form pleasant relationships with their clients and seem to really care about the client-advisor professional relationship; unfortunately, that’s not enough,” says Roberts, who founded Affinity Asset Management (www.affinityasset.com).
“Frequently, a new client will come in and discuss how much they enjoyed working with their previous advisor who, too often, seems to have had their priorities backwards.”
Too often, financial advisors are more motivated by pushing products such as investments and insurance policies before deducing a strategy that meets the needs and expectations of a client for his or her retirement years, he says.
“To put it simply, the way many advisors go about building a retirement for their clients is like planning the wallpaper, carpet and other aesthetic considerations for a house before the blueprints have been completed,” Roberts says. “It may seem obvious that you need the blueprints first, but many people – laypeople and financial professionals alike – can get lost in the details.”
Roberts reviews these six missteps that are too common among advisors in the industry:
1. The client’s sense of being a priority is directly proportional to his asset size or income. Many firms and advisors have a minimal wealth criteria to judge whether or not someone is worthy as a client. If the person meets the minimal criteria, that client may be getting just the minimal amount of service they deserve.
2. The advice a client receives may lean toward selling the client financial products. Clients want advice that truly has their best interest at heart. Advisors from some large financial institutions may have an ulterior motive with their recommendations – they’re trying to push products. Independent firms and advisors usually do not have this burden.
3. The client’s financial game plan feels fragmented; various advisors do not feel like a team. Tax and legal issues, mortgages, planning services and more – these are areas needing to be addressed, which typically requires multiple professionals. If they’re not all on the same page, the client’s strategy is probably suffering.
Next page: 3 more missteps
- Insurtech Updates: Launches, expansions, partnerships and more
- NAIFA launches LACP designation as new ‘gold standard’ for life and annuity professionals
- Partial Fiduciary Rule implementation starts Friday – with no enforcement
- More than 8 in 10 advisors now use social media for marketing, researching prospects and building relationships
- Resources being rolled out to help with partial Fiduciary Rule compliance
- Best-ever start to a year for indexed life sales, new report says
- Diversity, innovation top agenda at Women in Insurance Global Conference
- Millennials pose greater auto risk than previous generations at same age, but appear worth it in long run