Picking the right financial advisor is an extremely important decision. It’s not just hiring someone to handle finances in the short term; they’ll need to account for long-term financial goals too. This requires choosing an advisor that can be trusted to make sensible decisions with a client’s preferences and goals in mind.
While most financial advisors are ethical professionals with their clients’ best interests in mind, there are exceptions. And sometimes, advisors may inadvertently display certain red flags that weaken client confidence. Whether intended or not, these specific behaviors could lead to ending a financial relationship at any point in the advisor-client relationship.
As you seek to build your clientele as a financial advisor, make sure you’re not exhibiting these red flag behaviors.
1. Don’t talk more than you listen
Your client should feel confident that you are interested in them and their goals. This is especially important in the first meeting. While you’ll ultimately want to explain what you can offer, the first meeting shouldn’t be focused on you. It should be focused on your client. Work to understand your client’s goals as well as their needs, history, family, and risk tolerance. When you get to know your client, the more likely they will be to trust that you have their best interest in mind.
In addition, financial matters can be a sensitive topic for many. The client should be comfortable enough with you that they can share their fears and mistakes without the worry of judgment. A client’s financial goals may not fit the usual mold due to their past experiences and current life situation. Regardless, a client should feel confident that you will consider their goals, advise them thoughtfully, and help them aim for and achieve the best outcomes.
If you’re constantly talking over your client, they may not feel comfortable sharing their financial anxieties and goals. As a result, they may look elsewhere for an advisor that shows more care.
2. Don’t pressure your client to buy immediately
A client shouldn’t feel undue pressure to decide immediately on an investment. This kind of pressure may lead a client to feel like they are not in control of their investments. It may also lead them to believe that you have an ulterior motive. They may think that you are trying to sell a specific product or that you will earn extra commissions through their investment.
Whether that is the case or not, clients should feel that their advisor has their best interest in mind. If you think certain investments are right for a client, build an objective case for them and allow the client to decide on a timetable that they’re comfortable with.
3. Avoid muddled communications
Although an advisor does not necessarily need to consult before making trades with a client, letting a client in on what is being done will help them feel like they are part of the process.
Advisors should be clear about what and how they are being paid. Some common ways that advisors make money are through fees, through a percentage of assets’ value under their charge, or through compensation from commissions made via selling insurance, annuities, or other products to their clients.
It’s also a red flag if advisors recommend meeting beyond initially established schedules or refuse to offer estimates for projects. Financial advisors should be clear about how they are being paid, about what they are doing and why, so that clients don’t question interactions and advice.
4. Know your stuff (but don’t talk above your client’s heads)
If you’re advising a client about real estate investing, you’ll be a lot more credible if you’ve had boots-on-the-ground experience with it yourself. Or are associated with someone who has. If there are areas of finance where you feel unsure, take the time to invest in your own education and to try new investments yourself. This will serve to make you a more trustworthy coach.
Just make sure that as you’re amassing new knowledge, you remember that the client isn’t an expert in all-things-financial. That’s why they hired you! Talk in terms that they can understand without bombarding them with all kinds of jargon that they don’t want or need to know.
5. Be likable
Don’t be so concerned about getting every particular right that you come off as all-business or prickly. You have a unique personality…let it shine through. And don’t try to be something you’re not. Clients will quickly see through your lack of authenticity.
If you sense that you really don’t jibe with a certain client, don’t get offended if they choose another advisor. Because people are trusting their advisor with their financial future, they may want someone who they share different hobbies, senses of humor, or values with. Some of this will be out of your control, so don’t stress about it.
As you magnify your own personality and are comfortable in your own skin, the people who will work well with you will naturally be drawn to you.
Contact me for more ways to build successful relationships with your clients. As a top business coach for financial planners drawing on years of successful multifamily investing experience, I focus on values based leadership to help advisors network, build thriving relationships with clients, and increase clientele.