While most clients like working with sociable advisors, friends aren’t what they’re seeking when they shop for advisors. Every client we spoke with was clear they wanted a strictly professional relationship with the advisor, no different from a physician or an accountant. All are wary of aggressive product-pushers, and appreciative of advisors who remain mindful of their goals. Expectations about what grows from the advisor-client relationship vary according to priorities, but the underlying foundation – TRUST – doesn’t.


Michael Harding, 54, Self-employed 


Michael runs an employee-screening company out of Caledon, Ont. He’s had three financial advisors so far. The first one, about 20 years ago, was a short relationship that Harding terminated thinking he could manage better on his own. “It was naiveté,” he says.

He worked much longer with his second advisor, and severed ties only recently. The advisor was also Harding’s accountant, and he sensed a conflict between the advisor’s priorities and his own. “He was a great accountant but then he wore so many different hats, I wasn’t as confident with his ability to manage my investments.”

Harding sensed a certain lack of disclosure. “It became apparent there was a lot of information I was missing regarding how my money was being invested.” He also got the distinct feeling his advisor was pushing product. “I was incurring many unexplained costs, and became aware I was being moved from one fund to another, and in the process incurring invisible costs and penalties.”

The suspicions coincided with a desire on Harding’s part for more personal service. “I wanted somebody who would take the time to explain what I needed to understand and in the language I needed to understand it in. Someone who was able to move at my speed.”

Another major factor in Harding’s decision to move on was that the advisor changed affiliations a couple of times, and kept bringing in new sub-advisors to talk to Harding about new products. “I wasn’t comfortable with that. I went into a meeting and my advisor wasn’t able to attend it, and a new person had my file in his hand and I hadn’t okayed that. I felt my confidentiality was infringed.”

A close friend of Harding’s ended up recommending his current advisor.

ExpectationsHarding’s short-term goal was to protect his investments as best as he could. “The dollar and cents thing is the basis, if I’m investing money I want it not to shrink.” But in the long term he was looking for a true professional; someone he could trust and have confidence in. Above all, he wanted his advisor to be mindful of his goals and priorities. It was also important to Harding that his advisor be well connected, personable, and have good people skills. Being an excellent listener would be an added bonus.

“What attracted me to my current advisor was his holistic approach to investing – he prioritized my immediate needs, mid-term needs, long-term needs.”

Harding admits he’s learned more from his current advisor in the last six months than he did from his earlier advisor in the past 10 years. “He’s a good teacher. I’m not an astute or experienced investor; there’s so much I don’t understand.”

He also showed up at Harding’s door for their first meeting. “I liked that because I was on my own turf and comfortable. Also, I run my business from home, and it would have been really tough to drive down to Toronto every time I needed to meet my advisor.”

Harding also likes that his advisor introduced him to all the people he works with, and he never shares any information without Harding signing off first.

There’s also very little pressure to buy any product. “My advisor paces information very well. There are products and services I will probably buy, but if he brought them all to the table at once I’d be very overwhelmed. He’s good at pacing that. So it ends up being low stress when dealing with him.”

Harding also likes keeping the relationship at a professional level. “I don’t want my advisor to be my close friend.”

But he doesn’t mind spreading the word among friends, and has already referred his advisor to at least five people.


Maggie Hughes, 59, Retired IT project manager


Maggie Hughes and her husband have worked with three advisors, including one south of the border when they lived and worked there for eight years. Even though their American advisor worked for a large bank, he didn’t much care about hurting the Hughes’ interests to serve his own.

He turned out to be an aggressive product-pusher, and kept pitching a long-term health insurance product Hughes didn’t wish to buy, completely disregarding the fact that she had a group plan option at work that was a lot cheaper. “He was with American Express, not some fly-by-night guy who’d hung a shingle up. I was quite shocked. We suspect he earned a hefty commission for selling that product.”

When Hughes turned 55, she and her husband returned to Canada, and she actively started planning an early retirement. Their current advisor helped them evaluate the kinds of investments they should be looking at to meet that goal.

Hughes is so happy with her present advisor that she says she wishes she’d started working with a holistic financial planner years ago, maybe in her 40s. “In my 30s and 40s I just invested in the company I was working with.”

After a bad experience, integrity and trust were understandably the main things Hughes was looking for in an advisor. She also wanted an advisor who was mindful of her goals, and knowledgeable of the products available. While gender was no criterion, designations certainly were.

Hughes says her advisor helped her ride out this recession brilliantly. “She had us locked up in guaranteed investments. She called often, sent us emails, and constantly assured us we’d weather the storm. Even before the recession hit, she suggested we get into life-income funds. And when I wanted to draw down some of the funds, she explained why I should wait till I turned 65. Both turned out to be great choices.”

Expectations

Hughes expects advice that will help her meet her goals and stay on track. She also wants her advisor to make sure she understands the implications of her decisions. “My advisor has incredible patience and re-explains things I don’t understand. That’s invaluable to me because I’m not a financial person,” she says. “My advisor’s very easy to talk to, and can translate difficult concepts into layman terms.”

Hughes also appreciates regular updates, or a quick call when something comes up. Quarterly statements are important to her.


Sharon Moyer, 43, Executive assistant to the president, Winners International


Georgetown resident, Sharon Moyer, is married with two children and has been with her current advisor for more than ten years. “He’s been our only advisor since we started investing.”

The reason for this rock-solid relationship she says, is because he knows his business inside out, is always on top of things, and understands the market well.

And Moyer knows of what she speaks, because ten years ago she too worked for a bank and was licensed to sell mutual funds. “When I worked for a bank, I felt advisors were dealing with too many products and they didn’t really have a true understanding of the markets.”

When it comes to financial planning, investing isn’t the only concern; tax planning is as, if not more, important to her. And she feels advisors affiliated with banks lack that expertise. “I always wanted more rounded planning, not just retirement saving.” Moyer feels much more comfortable with a financial planner who looks at everything. And if there are blanks he can’t fill, he has affiliations with network of people who can.

Expectations

Moyer expects her advisor to have her best interests at heart. She also likes to receive solid advice, multiple options, and have a choice of alternative investment vehicles. She likes that her financial advisor brings something to the table every time they meet. “My husband and I have been good savers, but we didn’t really know what to do with our savings. Our advisor provided us the tools needed to move our portfolio forward and reach our goals.”

The two primary qualities she values: Knowledgeable and trustworthy.

Her advisor is fee-based and she’s more than willing to write a cheque because she sees the value of that advice. “I’ve tried different tax options I wouldn’t otherwise have tried or even known about, had it not been for our advisor.

Moyer also likes the fact her advisor isn’t pushy. “He’s like us – working, middle class, with kids – and has a lifestyle similar to ours. He knows where we’re coming from. I feel he’s speaking to us on our terms, and isn’t somebody coming ten levels above me. I trust him, and the options he’s putting in front of me.”

Credentials are important, Moyer agrees, but they’ve never really been an issue for her. She too recommends him to everyone who asks. “I’ve referred him to about 15 people, and four are already using his service.”

Originally published in Advisor's Edge