Finding the Way Back to the Right Path
AT times, there exists a mismatch between what clients expect when they engage the services of a financial services professional and the objectives of the financial services professional themselves.
In an ideal client-financial adviser relationship, both parties should share a common “end in mind”, which is to grow the client’s wealth in the best way possible. When there is mutual alignment of goals, you can see positive results from harnessing the synergies of the partnership between the financial service professional and the client.
However, the reality is that ideal situations are not easy to come by and very often, misalignment of goals present a very real stumbling block towards meeting the client’s expectations.
Why is it that the client sometimes feels that the financial services professional is not doing what is expected of him, even though the financial services professional feels that he/she has already delivered his/her best advice to the client?
To get to the bottom of it, we should revisit the drawing board and examine how “the alignment between client and advisor” starts to deviate.
Seeing only trees instead of the woods
Clients come to financial service professionals with one main goal in mind – that is to grow their wealth. At the onset, I believe this much is clear.
Whether or not this goal is explicitly communicated to the financial services professional is immaterial because for all intents and purposes, every other course of action taken subsequently should ultimately be geared towards this one goal.
However, this is where the challenge lies.
Many financial services professionals whom I come across are, in fact, very experienced product specialists in their own right. The majority hail from the unit trust, banking, estate planning or insurance industry where they have in-depth knowledge on the personal financial products under their wing. Because of their experience and familiarity with the products they sell, there exists a sense of assurance for the clients to rely on recommendations given.
Financial services professionals, who are product specialists, will naturally build on their strengths and experience in what they do best. This often involves focusing strongly on selected products that they feel are the most competitive and beneficial to clients. Frankly, there’s nothing wrong with it. In fact, knowing which products are best suited for the client is one of the hallmarks of an effective financial adviser.
Ironically, it is this high level of specialisation which causes the financial services professional to fail in his/her duty to support the client to meet their ultimate goal. How can they, when excessive focus is placed solely on products as a solution to grow wealth?
Inadvertently any financial services professional that practises this will lose sight of “the end” and ultimately override the client’s ultimate goal.
This revelation may come as a surprise to both client and financial professional alike, but it is precisely what is happening on a daily basis.
I can’t fathom the number of clients I have consulted who have deviated from the path and possess a trail of impractical products in the wake. Not only is this ineffective towards achieving the ultimate goal of growing net worth, but there is also a risk of there being overlapping investment choices that could cost money or even decisions which conflict one another.
Over time, the client becomes disenchanted with the ability of the financial services professional to meet his expectations and starts to lose faith in the service provided.
How to bridge the gap
Therefore, I urge all financial services professionals to reflect and rethink their role and obligation to clients, and adjust their bearings if necessary. They should ensure that they have a bird’s eye view of the client’s financial position in totality in order to act in their clients’ best interest.
Instead of recommending financial products in silo, keep in mind the ultimate objective and assess how the recommended products fit into the client’s big picture.
Moving your finances towards the same end
Likewise, I also call upon consumers to have more active involvement in the professional relationship with their financial adviser. Know what your ultimate goal is and be alert and attuned to all personal financial decisions made.
Should you feel that you are straying away from the end goal, it is your right and responsibility as the client, to remind financial services professionals of their role to keep both parties on the same track.
Think of it as a form of check and balance. Mutual monitoring will prevent any potential gaps from occurring and forge closer working ties between the financial professional and the client.
It may be easier said than done, given the complexities of personal finance, but it’s one that is achievable if a financial services professional has a strong and robust advisory system capable of supporting the financial services professionals’ true mission.
Ultimately, a financial services professional needs to stay relevant and remain engaged with their clients in order to deliver to his/her level best throughout the professional relationship. They must not lose sight or focus, and be able to ensure that their service offering, be it life insurance, will writing, unit trust, loan or banking products, has what it takes to support the client’s objective of growing wealth.
If these circumstances can be realised, then and only then, I believe the financial services professional and client can find their way back into a “loving relationship” again.
I’ve been looking for someone to shed some light,
Not somebody just to get me through the night,
I could use some direction,
And I’m open to your suggestions.
All I wanna do is find a way back into love.
I can’t make it through without a way back into love.
And if I open my heart again,
I guess I’m hoping you’ll be there for me in the end!
~ Lyrics from Way Back to Love from the movie Music & Lyrics