Why Advisors Need to Go Beyond Investment Advice

Two businesspeople shaking hands across a table
August 19th, 2020

Article originally appeared at FA Magazine by Gabriel Garcia

I recently wrote a few articles about what your clients are most drawn to (women advisors have an edge), and how risk management makes you a better advisor. This recent article in FA Magazine echoes my earlier messages, and goes on to explain a little more about what your clients are looking for in you (their advisor) during these turbulent times in the global market.

Although this profession began as investment-advice forward, it may not come as shock that over the past two decades clients have come to advisors for much more.

As this year continues to surprise with unprecedented market moves, an evolving pandemic, civil unrest and deep implications for how we live and do business, client engagement has understandably skyrocketed. Given this tumultuous backdrop, it also makes sense that advisors are experiencing a wave of demand for something different than your technical expertise: empathy.

Counterintuitive as it may sound, advisors need to allocate less time to investment advice and more time to relationship management.

What Do Clients Want?

A human touch and personal connection with clients is now a key differentiator. Access to you is now front and center. So, what are clients looking for in their relationships with advisors, and how can you meet and exceed expectations?

Americans are experiencing the highest levels of stress and anxiety since the Great Recession of 2008–2009, with 53 million more people suffering significant worry on any given day this spring than in the summer of 2019. On top of that, 82% of American investors expect the pandemic to have an impact on their lives and legacies for years to come, while 54% of wealthy individuals are worried they may not have any wealth to pass on to the next generation.

In short, clients are acutely stressed. Emotion drives as much as 70% of customer behavior, which helps explain how the current anxiety surge correlates to soaring demand for personalized, holistic wealth-management services—and a desire for increased access to an advisor.

Clients come to RIAs with financial questions and goals but, more importantly, they also come for support. Advisors are increasingly called upon to listen, show understanding and concern, and provide a steady, trustworthy presence to help ease the anxiety caused by uncertain times.

The Elephant In The Room

Emotion is the secret sauce in all your client interactions—and, as we’ll see below, even in your investment returns. Meeting clients where they are and addressing the emotional subtext of their concerns is essential from both a client retention and performance standpoint.

Even before 2020’s series of unfortunate events, research made clear that emotional decision-making is one of the greatest risks for investors—especially the temptation to time the market and chase performance. Of course, many of us don’t consciously realize when emotions are driving our behavior, which is why it’s critical that advisors pay special attention to building relationships.

When you lay the foundation of a strong connection and build trust with clients from the start, this provides a platform for honest and empathetic conversations that allow you to show up for your clients in important ways. Acknowledging underlying thoughts and emotions sets clients at ease and helps build trust, laying the groundwork for successful behavioral coaching.

The concept of behavioral investing essentially positions the advisor as a buffer between an investor and their emotional impulses, leveraging behavioral coaching to address emotional concerns and anxieties and steer clients back to a solid investment strategy. And we know behavioral coaching works: Vanguard argues that behavioral coaching may be the most significant value-add for advisors and can net an additional 1–2% in their investment returns for clients by helping to steer them away from emotional decision-making.

Of course, advisors only have an opportunity to offer behavioral coaching if they can earn trust—which involves remaining present, available and responsive. In a remote environment, it’s more important than ever to pick up the phone, schedule a video call and reply to any attempt from clients to touch base: Not returning a call is the top reason investors leave their advisors.

But starting a conversation is only half the battle: It’s important to conduct all interactions so that clients feel heard, understood and valued. Harvard Business Review offers the following insights on demonstrating empathy:

  1. Empathize first.Before delving into technicalities or problem solving, take the time to listen, understand what clients are feeling and saying, and then express comprehension and care for their concerns.
  2. Take a collaborative approach.Let clients know that you’re interested in addressing their concerns and solving their questions with them, not for them.
  3. Invest in the quality of the relationship. Taking the time to connect emotionally with clients opens the door to opportunities to glean greater insights and potential productivity down the road.

Open The Floodgates

While the market is unpredictable, we know it makes sense to plan for the long term. Gently refocusing clients on the big picture is an art that is deeply tied to relationship building: If you know what matters most to your clients, you can speak their language and help them see how the behavior and strategy you’re advising serves their best interests and supports their needs.

And you can only do that by committing time and effort to build relationships and tune in to the emotions that lie beneath your clients’ concerns. Without a solid foundation of relationship management, you may never have a chance to showcase your investment advice chops before clients move on.

How long the financial services industry will have to continue to operate remotely and without in-person interaction remains to be seen, but the flood of client engagement and demand for personalized service in an increasingly digital world appears to be here to stay.

Clients today need a high level of personal attention not just in financial matters, but in every aspect of their relationship with their financial service professionals. Tech can’t do everything, which is why your clients want to talk to you rather than to an algorithm. To meet clients where they are—financially and emotionally—advisors need to be mentally present and available.

The human elements of empathy and relationship are a competitive edge that will help set you apart and sustain your clients—and your firm—in unusual circumstances.

View Original Article

Taking it a Step Further

When serving your clients at this new level of attention, it’s important to bring value to the table – value they aren’t expecting and are grateful to have. In that light, I want to offer YOU something of value that will in turn bring a ton of value to your clients and prospects.

One of the tools my team and I developed is called the Crisis Checklist. This checklist covers all the areas your prospects and clients may be exposed to risk they can’t see. It helps create a dialogue around what their financial goals and future lifestyle looks like, and gives you an opportunity to help them achieve it with the right amount of protection and process.

It’s an extremely valuable exercise for your clients, and it will help you provide more in your business. As a value-add to you, I want to give you the exercise and a perfectly written email you can send out to your clients so they schedule this quick crisis meeting with you.

Simply request it here and start using it with your clients immediately!


  • This field is for validation purposes and should be left unchanged.

It’s just one of the many tools you’ll get as a student in the Elite Advisor Success System™ – a completely online program that gives you my seven-figure playbook so you can serve more clients.

Business Success, Client Relations, Leadership

Pin It on Pinterest