Client expectation:

“I want advice based on my whole life. For example, if I get a job offer, I want my advisor to help me consider the details.”

–Lesley Isaacs, 44 operations specialist, mother, regional cuisine expert; Toronto

Advisor solution:

Darren Coleman senior vice-president and portfolio manager at Coleman Wealth, Raymond James, Toronto

Fortysomethings have competing priorities (e.g., jobs, kids, parents, debt, saving), and they may feel ignored by the media, which focuses on boomers and boomers’ kids. Help them clarify their priorities, but don’t ask, “What do you want to do in retirement?” They’ve been too busy reacting to urgencies to reflect meaningfully on the future.

I ask, “What do you want to talk about today?” That way, the client controls the meeting by setting agenda item number one.

I’d help Lesley see her job options by quantifying metrics on paper, comparing pay, benefits and vacation time. I’d ask: What non-cash compensation or intangibles attract you—deferred shares, more vacation time, a change in location, security or flexibility? Which metric or intangible do you value the most?

Further, I’d play devil’s advocate by asking questions to help her see different perspectives. Is the salary competitive for the industry? Maybe she’s excited about receiving and holding company stock. But what if the stock makes up the bulk of her net worth, and the company does poorly? In that case, is she comfortable with her risk exposure?

Client expectation:

“I expect my advisor to be fund-agnostic, but also to make good suggestions. Further, I want help with nuisances. For example, I started to set up a LIRA over the phone, but [made a] mistake.”

–Sander Steer, 45
businessman, motorcyclist, father; Calgary

Advisor solution:

Beth Hamilton-Keen director of investment counselling at Mawer Investment Management, Calgary

It’s best practice to set expectations at the start of a relationship. Ask how clients want to be contacted and how frequently. Do they prefer a proactive or reactive service style? Use your intuition to pick up on things clients say indirectly. Regularly ask clients for feedback about your service.

If Sander wants objective suggestions, and he makes some investments on his own, he’s looking for a partnership. In such a relationship, suggestions (delivered according to set expectations) must be based on an understanding of his whole portfolio (his return objectives, risk tolerance and overall asset mix).

As for the LIRA, closing one is easy if it’s at the advisor’s institution; I’d set up the LIRA properly and get rid of the old one.

But it sounds as though the LIRA is at a discount brokerage; if so, no one can close that account on Sander’s behalf.

I’d offer to make the call with him, so I’m there if he needs help answering the call centre’s questions.

Client expectation:

“I expect my advisor to understand my financial situation by putting himself in my shoes.”

–Pierre Wirawan, 47
admin clerk, father of three; North York, Ont.

Advisor solution:

David Wm. Brown partner, Al G. Brown & Associates, Toronto

I don’t assume I know what someone’s looking for, and they may not know themselves. I’ll suggest several subjects—retirement, budgeting, insurance, wills or PoAs—and ask what they want to focus on first.

Once we have the focus, I ask: When we’re sitting here three years from now, what accomplishment do you want to be celebrating? I would encourage Pierre to bring his spouse to our meeting; often, spouses have different concerns from one another without realizing it. Generally, at his age and with children, risk management is important.

I’d ensure he has insurance, a will and power of attorney. I’d ask more questions—about his pension plan, marriage contract, investments and employment plans—to more fully understand his life circumstances.

Client expectation:

“I want to know what strategies you use so my portfolio outperforms the market.”

–Hanif Chatur, 45
physician, travel and photography lover, father of four; Woodstock, NB

Advisor solution:

Bev Moir senior wealth advisor at Scotia Wealth Management, Toronto

You can’t outperform the market, because you can’t time the market. I’d show Hanif an Andex chart to prove a balanced portfolio is less volatile over time.

I’d also reframe his question: How do we capitalize on the investment strategy that supports his goals?

For example, with monthly pre-authorized contributions, he takes advantage of dollar-cost averaging; with market volatility, he takes advantage of low prices when dividends are reinvested.

I do have one surefire way he, as a father of four, can beat the market: Contribute $2,500 per child to an RESP and get the $500 CESG—a guaranteed 20% rate of return.

As a form of income splitting, he could contribute to his spouse’s or child’s TFSA (if the child’s 18 or older). With the smaller amount of money in his spouse’s TFSA compared to his RRSP, as well as the potentially longer time horizon, he could be more aggressive and invest 100% in equities.

Client expectation:

“I don’t know a lot about investing, so I expect guidance. In retirement, I’d like to move to the Gulf Islands and travel.”

–Michelle Boulton, 46
self-employed consultant, mother; Saskatoon, Sask.

Advisor solution:

Cynthia Kett principal at Stewart & Kett, Toronto

Investing is only one piece of a big financial puzzle. To reach her retirement goal, Michelle first needs a savings plan and an investment policy statement.

To develop the savings plan, I’d find out how much capital she needs, growing at a reasonable rate, to retire comfortably. Then she needs to save that capital. Being self-employed makes that challenging. Maybe she’ll need to save 20% in her better months, [since] in rough months she’d live off savings.

An investment policy statement has seven elements: use of assets, timeline, level of risk, rate of return, asset mix, ease of management (how much Michelle participates in managing her portfolio) and costs. (Remember these elements with a mnemonic: “U Tried to Live Rich And Everything Crumbled.”)

Details to consider when developing the policy are date of retirement, length of retirement, her risk comfort level, required return, preferred assets and the impact of costs on the portfolio (especially in volatile markets).

by Michelle Schriver, assistant editor of Advisor Group.