On Being A Better Client

The relationship between investment advisor and client has changed tremendously since I rejoined the business in 1999. Back in the day, we were called “stockbrokers” or “financial consultants.” Today it’s “wealth manager” or “wealth advisor.” While sometimes I have a problem with the term wealth manager—it sounds so highbrow—this is in fact the direction the business has moved. Gone are the days of recommending stocks and bonds. The bigger picture today is about planning and advice, truly understanding your clients’ goals, dreams, and fears about money. Conversations revolve around questions like “How much will I be able to draw down on each year when I retire?” and “How much do I need to save for college?” Clients want to know what kind of insurance they need instead of whether it’s better to own stock in Coke versus Pepsi.

A few weeks ago I wanted to review my will—I couldn’t remember whom I had appointed as executor. I also couldn’t remember where I had filed a copy! After tearing about my file cabinet, I remembered that I had downloaded a copy of our will onto the online vault with Commonwealth, where I keep my investment accounts. After a few clicks, I was able to read a digital copy and have my question answered.

This got me thinking . . . what if all of my clients did this? What if I urged them to take advantage of the tools that are available when working with an advisor? How can you truly work with a wealth advisor if you don’t have your whole financial picture? Would you go to the doctor for a checkup and not tell the doctor that your chest hurts when you breathe or your hip is constantly sore?

If I were a client of a wealth advisor, these are the things I would want to know and do.

1.       Store all important documents—wills, trust, insurance policies—in the company’s electronic vault. Then, when I need them, I know where they are and can read them easily. (Make sure you understand the company’s data security policy.)

2.       Make sure my advisor knows about my life insurance policies—the face value, carrier, and policy number.

3.       Store a copy of my power of attorney and health care proxy. (If you don’t have them, get them.)

4.       Share my life plan or goals. What am I saving and investing for—to retire early, arrange to leave money to charity, because I am concerned about how my kids will live?

5.       How much am I paying for services, and how am I paying? In some cases advisory fees are tax-deductible.

6.       Run a retirement income projection to see how much money I can live on after I stop working.

7.       Embrace technology by signing up for electronic delivery for all statements, confirmations, tax documents, and prospectuses. Aggregate all outside accounts, such as my 401(k), so I can see my financial picture in one place.

8.       Introduce my older children to my advisor. They can learn about savings and setting up retirement accounts and discuss how much to defer into their 401(k) at work. (If they have children, consult with your advisor about a 529 plan.)

Today’s advisor is more than an investment manager. It’s worth taking advantage of both the technology and, more important, the human touch in your relationship.