Get used to busybody clients

By Philip Porado | December 17, 2009 | Last updated on December 17, 2009
2 min read

As the economy recovers, one challenge will be to keep client greed under control, and work through the process of how best to collaborate on investment decisions.

“You’re always going to have a client that heard or saw something on TV,” says Rob Kelland, CIM, FCSI, Portfolio Manager, Director Wealth Management for ScotiaMcLeod, “But the vast majority of clients we have don’t give us any grief.”

Rob Kochel, VP, National Accounts, Invesco Trimark, says advisors will need to be sharp when clients make suggestions, as there are social science studies that determine some people will gamble proportionally to what they’ve lost. “They’ll see some new solution and come in and say, ‘We should be trying this,’ ” he says. “And this gambling for resurrection reality is rooted in some clients in particular in the face of this last downturn.”

While she’s only been through a couple of cycles, Kathleen Peace, FA, CFP, Bennett March of IPC Investment Corp, says she’s noticed greed rises when things are going well. “The questions and recommendations of things my clients would like to try goes up with the level of excitement,” she says. “Now that things are down, and they are fearful, there are no suggestions.”

Cynthia Kett, CA, CGA, RFP, CFP, Stewart & Kett Financial Advisors Inc., has seen some clients who may have been disenchanted with their investment advice come in and say they can do better, or announce they’re going to shift to ETFs and do their own investing. “Then we point out, ‘Even if you do that, you still have to decide which markets to participate in. How are you going to make those decisions?’ ” she says.

Ownership is key, says James R. Taylor, CLU, Financial Health Management, which is why he works to engage his clients in the investment process. “The only way you get ownership is by having them involved in what’s going on,” he says. “In terms of whether or not they can do it themselves, the reality is in the short term that seems to be a viable option. But getting something cheaper doesn’t mean they’re going to get the results they want. And I think they have to understand that.”

Philip Porado