The trouble with client gifts

Should I give a gift to someone who gave a referral?

“If you’re not in the gift-giving business, don’t start,” said Rob Kochel, vice-president of Invesco Global Consulting, at a seminar run by CFA Society Toronto last week. “The moment you start, it’s hard to stop.”

For example, Kochel said his financial advisor used to give him a large poinsettia each December, which he and his wife would proudly display on their front porch. One year, the poinsettia didn’t come at the usual time, and as the month wore on, Kochel realized it wasn’t going to arrive.

“It’s a week before Christmas,” he said. “Now it’s my problem. [My wife says,] ‘You’ve got to find us a poinsettia.’ Everywhere I go, they’re all Charlie Brown poinsettias.”

Turns out, his advisor had sent a letter advising that the annual client gift would be a charitable donation instead of a poinsettia — but the Kochels only received the letter in January.

George Hartman, president and CEO of Toronto-based Market Logics Inc., told Advisor.ca that timely gifts, rather than gifts initiated exclusively by the calendar that become expected or routine, can help advisors to deepen their relationships with clients.

He also suggested the gifts should be personalized to align with recipients’ interests, such as a subscription to a top wine magazine for wine enthusiasts. Meaningful gifts should also be “of sufficient quality to be valued,” Hartman said. For example, “a ballpoint pen with a logo is seldom valued, [while] an engraved Montblanc is.”

Kochel agrees. At the CFA Society Toronto event, recounted the example of receiving a $15 Starbucks gift card following a speaking engagement. He said using the card led to embarrassment when he ordered more than $15 worth of coffee and pastries at the coffee chain and didn’t have another form of payment.

If a non-gift-giving advisor wants to thank a client for a referral, Kochel recommends sending a handwritten thank-you card, and handwriting the address as well. The messier the handwriting, the better to demonstrate how hard the advisor tried, he joked. He also suggested using green ink since it will stand out (but never red).

Hartman agrees that handwritten is best, adding that e-cards saying that an advisor has donated to charity can fall flat. “People don’t believe you,” he said.

Furthermore, “you don’t need to be part of the gift,” Hartman said, referring to advisors who give their clients sports and concert tickets. “Let the recipient decide who [goes] with them.”

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.