Dollars & Sense Survey: Work with the gatekeepers

Know your clients’ gatekeepers, and make sure you can work with them. That message came through loud and clear in answers to a set of questions contained in the investor portion of our ninth annual Dollars & Sense Survey.

This year’s survey took a look at the differences in investing approaches, and the performance results, for three client groups: Those who worked solely with advisors; those who were committed to the do-it-yourself route; and those who worked with advisors but also did some DIY investing.

The advisor portion of this year’s survey asked advisors how they determine if clients dabble in the DIY space, and how that impacts their relationships with those clients.

Results are positive for advisors, particularly in a component of the survey that looks at which sources clients trust for financial guidance, and the likelihood they’ll follow through on the advice put forward. Within a blended data set that looks at responses from all investors, including some who say they never use advisors, a very high percentage (98%) say that if they solicit advice from a financial advisor, they take it.

But other strong influencers are in play.

While a far lower percentage of respondents indicate they consult with accountants or lawyers about their affairs—12% and 3%, respectively—those same clients have a high likelihood of taking the advice offered. A full 95% of those who consult accountants report taking the advice, and 83% say they accept financial guidance provided by their lawyers. The stats also show clients who consult these high-level centres of influence are, on average, wealthier than the larger response group.

In other words, the very clients advisors want most are strongly influenced by people who can act as a barrier to the advisory relationship. So, if you suggest an investment, tax or estate strategy, and an accountant or lawyer is consulted and offers contrary advice, it can put a dent in your relationship with a client.

Not the best of scenarios, but what’s an advisor to do?

You can start by asking clients who else they consult with, get a sense for how closely they follow the suggestions from those other professionals, and find out how long those relationships have existed.

Ideally, you want to meet with those gatekeepers. While each of you has a stake in maintaining a relationship with the client, you’re also all fiduciaries with a vested interest in ensuring the client prospers and gets the best possible advice.

Further, you may have insights into a client’s needs that a lawyer or accountant lacks, and vice versa. If you can learn from one another and build a clearer picture of the client’s past, it can help carve the right path for his or her future.

These consultations will build trust. And any way you slice it, working with a fellow influencer beats having them damage a valuable relationship.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.