Clients To Advisors: Let’s Work on Our Relationship

By Cyril Tuohy

Financial advisors often stress the value of entering into a long-term relationship and the importance of the client's entire financial picture, but a new survey casts doubt about the sincerity of the commitment and the quality of the partnership.

Among clients receiving professional advice, only 56 percent said their primary advisor gives them an understanding of their complete financial picture, according to findings from the 2016 Northwestern Mutual Planning & Progress Study.

In addition, only 43 percent of respondents said their primary advisor has a long-term commitment and only 41 percent said their primary advisor provides tailored attention. Northwestern surveyed more than 2,000 American adults age 18 or older.

“The numbers should serve as a strong reminder to the industry that the people we serve need great partners as much as they need great products,” said Gregory C. Oberland, president of Northwestern Mutual, via email.

He called the results “a call to action” for advisors and clients.

The good news for many advisors is that they simply have to do a better job serving the clients they have without necessarily worrying about acquiring new ones. Bringing new clients aboard is almost always more expensive.

A finding that only 56 percent of respondents said their primary advisor gives them a complete picture may be skewed, however, by the fact that 32 percent of respondents said they work with multiple advisors to run retirement planning, investments and insurance.

The complete financial picture includes the protection side, not just the investment management side, Oberland said.

Signs of Danger

Many advisors recommend reviewing client portfolios and financial positions once a year at least, if nothing else to make sure planning is on track.

Among those with a financial plan, 82 percent believe that their financial plan should be reviewed at least once every six months. However, 62 percent of respondents also said they don't have a financial advisor of any kind, the survey found.

That is an indication that “people recognize the need to be proactive, but maybe the urgency isn’t there,” Oberland said.

To be sure, if an advisor isn’t accessible or incommunicado, especially when times are volatile, or if an advisor can’t recall his or her client’s name since the last time they met, or if an advisor isn’t listening to what a client wants, then clients should consider looking for another advisor.

Meeting too often, however, is also a warning sign.

Advisors who call a meeting simply to discuss a change in a fund position may be more interested in boosting commission revenue instead of nurturing a long-term relationship.

Advancements in technology have changed the advisor-client relationship for sure.

In a 2014 interview with InsuranceNewsNet, agent Vinnie Hirsch in Matawan, N.J., said he still conducted quarterly reviews with his clients. At the time, he was celebrating 50 years with Prudential Financial.

Hirsch, who joined the business long before cell phones, texting and email, said he gave clients the option of a face-to-face meeting or a phone call.

The Northwestern Mutual study also found that 68 percent of respondents said they do not have a trusted advisor who offers comprehensive lifetime financial planning.

The survey also found that 45 percent of respondents said they do not know where to get help they need as they move through life stages in search of different financial solutions.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].