How Financial Advisors Can Improve Client Relationships | Lord Abbett
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Practice Management

Planners have picked up some bad habits over the years. Here’s what do to about it.

This Practice Management article is intended for financial advisors only (registered representatives of broker/dealers or associated persons of Registered Investment Advisors).

In general, financial planners do not have the best reputation. I should know—I’ve been working in the industry for the past 20 years. I have been to cocktail parties where people walk away the moment they hear that I’m a financial advisor. But why? And what should we do about it?

About three years ago, I recruited an advisor who came from the entertainment industry. Not only was she from outside our sector but she’s also a millennial. Although it was my job to train her, I wound up learning a lot myself. She brought a fresh set of eyes to my business and our entire industry that I found both helpful and uncomfortable. In the end, her feedback on the things clients probably hate about us helped improve my practice.

The first thing I learned is that we need to improve our communication skills. Many of us are not good listeners—present company included. At best, we are selective about what we hear. At worst, we miss key facts about our clients’ personalities and family dynamics that leave them feeling misunderstood. Next, we default to jargon and financial speak that we think makes us look smart, rather than taking the time to really explain concepts at a basic level. Finally, we are not good at answering questions. We spend a lot of time hedging our responses in fear of being taken too literally.

Some of us think or act as though we are much more intelligent than our clients. When they suggest things they want to do with their money, we often steer them away or dismiss their ideas as too risky. I have even seen advisors callously make fun of clients behind their backs.

We may know more about financial markets than they do, but many of our clients are successful in their own right. They excel in their careers, run businesses, and have good ideas—if only we take the time to listen.

Financial advisors are not always open-minded about change. We invest in the same things we have always followed. We aren’t always proactive about learning, or about adapting to innovation. How many times, for example, has your client asked about things such as cryptocurrency, blockchain, robo advisors, socially responsible investing, venture capital, or marijuana? How often have we replied with one-liners like, “It’s too risky” or “I don’t understand it”?

Our industry is too homogenous. Think back to the last time you walked into a wholesaler luncheon—there was probably not much diversity in terms of age, gender, and ethnicity. We all sound and look alike. But we can learn something from people who look different than the prototypical advisor. Women, millennials, and minorities are underserved by the wealth management industry when there is a dearth of advisors who fall into these categories.

Last, we don’t present ourselves or our ideas very well. My new advisor’s former industry is one where appearance and presentation are paramount. Most media and entertainment executives convey sophistication by wearing clothes with a custom fit, and updating their wardrobes regularly. In terms of presentation materials, the entertainment industry is light-years ahead. Presentation books are visually and aesthetically pleasing. There is brand consistency and attention to detail on small things like fonts and colors, not just typos.

So, what’s the solution?

Communication—Consider bringing someone else to client meetings to be a second set of ears—perhaps someone junior at your firm. Exchange notes with them afterward to analyze what was really said. Write things down—especially specific phrases used by your client. What were they really saying? Or asking? Drop the finance-speak—remove all acronyms from your lexicon completely unless you define them.

Open-mindedness—The next time your client has an idea, research if it’s feasible and investigate ways to implement it, instead of immediately dismissing it. Assume the client is going to implement the idea with or without your help—think of ways to help protect them.

Diversity—Mentor someone from a different background than you. Bring on an intern this summer and teach him or her about more than cold-calling and low-level administrative work. Hire a millennial and be open to a two-way exchange of information.

Appearance—If you are still wearing a suit that is more than 10 years old, it may be time to upgrade your wardrobe by hiring a tailor or stylist. Also, hire a design company and update your marketing materials and client-review books.

In summary, many of us have been resting on our laurels. Frothy stock markets have made us too comfortable. Our jobs have been extremely easy in recent years. News flash: competition is coming. It could be from robo advisors disrupting our industry and driving our profit margins lower, or millennials who aim to do business differently. We should all embrace the concept of continuous improvement.

If we want our clients to love us, we have to do more than just deliver returns. We have to listen better, present ourselves better, step outside of our comfort zones, and find better ways to connect with our clients. If our clients feel unimportant and misunderstood, perhaps that robo advisor will seem a more attractive option.

—by Allan Boomer
Allan Boomer is the managing partner and chief investment officer of Momentum Advisors in New York. He co-hosts a weekly radio show on SiriusXM Ch. 126, which focuses on wealth building and entrepreneurship. Follow him on Twitter @MomentumAdvice.


The information provided is not directed at any investor or category of investors and is provided solely as general information about Lord Abbett’s products and services and to otherwise provide general investment education. None of the information provided should be regarded as a suggestion to engage in or refrain from any investment-related course of action as neither Lord Abbett nor its affiliates are undertaking to provide impartial investment advice, act as an impartial adviser, or give advice in a fiduciary capacity. If you are an individual retirement investor, contact your financial advisor or other fiduciary about whether any given investment idea, strategy, product or service may be appropriate for your circumstances. The information contained herein has been provided by sources other than Lord Abbett which are believed to be reliable; however Lord Abbett cannot guarantee the accuracy or completeness of this information.

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