The ClientWise Blog

Be the Quarterback!

Posted by Chris Holman on Sep 20, 2011, 4:52:00 PM


I stole this title from a good article written the other day by Thomas Coyle, provided by Dow Jones Adviser. (Link not available.)

The gist of the article is how financial advisors might position themselves towards investors who work with multiple financial advisors.

In the article, Coyle cites a number of financial advisors who place themselves in the conversation with their clients who have significant assets “held away” with other financial institutions. They have done so by positioning themselves as the “quarterback advisor”, i.e. the advisor who takes a broad, holistic view of the entire field of play; or all of the client’s assets, regardless if they are held/managed directly by that advisor.

As one of the financial advisors in the article says, he meets “very little resistance” when he asks his clients to discuss investments that he doesn’t manage directly.

However, another advisor cited in the article takes a cautionary note. He says that most financial advisors do not do enough to earn the trust of investors, in order for them to reveal their held-away assets.

This whole concept of “earning trust” is an interesting one. To continue the quarterback metaphor, let’s consider the importance as to why the quarterback must earn the team’s trust. No surprise, but it is imperative for a football squad to trust their quarterback implicitly. (Google " quarterback+trust+team ",/b> and see how many articles come up!)

For financial advisors who are working to build trust with their clients, one approach might be to first engage the client in an expansive discussion about the client's goals and dreams. As the advisor guides the discussion with thoughtful questions, e.g. What are you really trying to accomplish financially? Can you paint a picture of the way you want your future to look? When you visualize your future, what is the one thing that concerns you most?, it will become obvious that more information will be needed for the discussion to be completely honest and helpful.

Indeed, in order for the client to finish painting the picture of their desired future… the advisor will need a complete picture of the client's entire financial life as it exists currently, in order to help them in a professional and comprehensive manner.

The three main benefits for investors to consolidate holdings with one advisor are:

  1. Better asset allocation,
  2. Streamlined reporting,
  3. Reduced portfolio risk.

The last point is especially meaningful for those investors who have the misguided sense that having multiple advisors is a good means to achieve portfolio diversification. (Quite the opposite is true. I've addressed this before. See this link.)

However, cagey and wary investors will not appreciate these very real benefits of portfolio consolidation...if the financial advisor hasn't earned their trust.

Making the effort to see the entire field of play, and engaging in a thoughtful, curiosity-filled discussion that compels the client to think about what they really want to achieve...is a good first step.

by Chris Holman

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Topics: Marketing Approach, Trust