Within the financial services industry, opinion is mixed on whether wealth management professionals should give clients advice on personal matters, on issues that do not relate to the client’s economic picture.
Some practitioners give this practice a wide berth, reasoning that giving personal counsel could lead to trouble or damage the advisor-client relationship, especially if the client disagrees with the advice or the recommendation works out badly.
But here’s another way of looking at it: judiciously handled, extending guidance to a client on non-financial matters can strengthen the relationship and provide benefits for both client and financial professional.
You have to proceed carefully, of course, and the recommendations you give must be at arm’s length, and solid advice.
Some advisors just talk, talk, talk, and go through the numbers with the client. But if you instead listen, you can learn so much more. Listen with empathy and be an active listener. Start by building your relationship with the client. After all, we are in the trust business.
A lot of times, as people get older, they need someone they trust and respect to help solve problems. Their friends may have died or moved away; their children may be estranged. They might not trust their new friends, sensing that some may have agendas where money is concerned. Sometimes they just need someone to talk to. They rely on you for so many things, it becomes natural that they turn to you with their personal matters.
So many wealthy people, especially as they get older, worry that they will outlive their money. At Coral Gables Trust Company, we offer a lifetime financial plan for our investment advisory clients. Clients can find this very reassuring because it takes a worry off their minds.
And sometimes, personal matters and financial advice can intersect: for example, if a client is concerned about homeless people and wants to leave money to a charity, we can help them figure out which are the most effective charities and how to go about making that charitable gift.
An anecdote: Some years ago, I went on a hunting trip to South Carolina with about 10 friends, some of whom are in the financial services business. One night about 2 a.m., the phone of one of my friends rang. It was a celebrity client of his whose son had just been arrested on narcotics charges. The client was crushed and feeling desperate. He needed someone he could turn to, and my friend stayed on the phone with him for two hours. That’s the kind of relationship you want to build, in which the client can confide in you and know their confidence will be respected.
This business is all about relationship-building. Take your client to lunch or dinner. Meet their children (because if a trust is involved, you hope the children will want to keep you retained as their advisor), and get to know them. As financial advisors, we’re not just recommending stocks and bonds; we’re here to build that special relationship with our client.