Clients pay for an advisor's expertise. But that doesn't mean they always heed the advice they're given in client conversations.
XIn rare cases, advisors repeatedly urge clients to take a certain action to no avail. Occasionally, advisors may even ask clients to document their refusal to follow through. That way, advisors keep a paper trail for regulatory compliance purposes.
Seasoned advisors know their role. They cannot compel clients to act. But by making a recommendation and explaining their rationale — and how it aligns with the client's stated goals — they hope to educate and persuade.
"You can't take it personally," said Howard Sharfman, an advisor at Chicago-based NFP Insurance Solutions. "We work at the client's pleasure and sometimes they are just not ready."
From his 35 years in the business, Sharfman has learned the value of patience and gentle questioning in client conversations. He has found that clients who don't take his advice may grapple with a range of issues that simmer below the surface.
"Advisors don't always know all the facts," he said. "Clients may not disclose or tell you everything going on in their world."
If a client doesn't take his advice, Sharfman might say, "I think the recommendation makes perfect sense. I believe I'm a reasonable person. And I know you're a reasonable person. So what am I missing?"
He then adopts a listening posture and lets the client steer the conversation. It may take time for respondents to reveal their underlying concerns or reservations.
Pave The Way For Follow Up
Thanks to his friendly line of inquiry, Sharfman often gathers information that helps him understand the client's outlook or situation more fully. Sometimes, clients admit that they're reluctant to take his advice because they're facing challenges — from health scares to family conflicts — that prevent them from moving ahead.
Meanwhile, he documents every recommendation and all client conversations. Maintaining thorough documentation "shows you're paying attention and you're in it for the long run," he said.
He may also signal his intent to follow up by adding, "I hope you don't mind if I bring this up again in our next meeting, because it makes a lot of sense."
In future client conversations, Sharfman experiments with different ways to convey the same recommendation. By varying his language and communication strategy, he finds that his message eventually sinks in.
"When we come with solutions, we often use the written word, the spoken word or pictures and graphs," he said. "So it helps to try a couple different ways" of imparting information and seeing what sticks.
If clients continue to resist his advice, Sharfman doesn't press too hard. His genuine interest in learning more about them wins out.
"When you offer good ideas that aren't acted upon, people still appreciate you're bringing them good ideas," he said. "Many times, they've said no and then recommended that idea to their friends and colleagues because they knew it was a good one."
Document All Client Conversations
Documenting all client conversations and communication is important on many levels. It's a critical part of compliance requirements. But it's also helpful in tracking what you tell clients — and to demonstrate your professionalism.
Kevin J. Brady, a New York City-based certified financial planner at Wealthspire Advisors, recalls advising a client about the restricted application strategy for claiming Social Security benefits. The client did not follow through.
Roughly 18 months later, the client said, "My friends said to do it. Why didn't you bring it up to me?"
"So we politely forwarded him the old email showing that we discussed this," Brady said. "It was a satisfying response and the relationship was maintained."
When it comes to proposed investment ideas, advisors sometimes face a different challenge: Clients are too busy to consider the idea and make a decision.
Nagging can backfire. Some clients are hard to reach or preoccupied with other issues.
If a time-sensitive or urgent investment decision needs to be made, advisors who don't hear back from clients may send them a written message stating, "Absent your objection, we will do the following."
Above all, experienced advisors know to avoid lecturing. Clients tend to chafe when given orders or addressed in a condescending tone.
"The advisor's goal to serve has to be higher than their ego," Sharfman said.
On the other hand, a client's behavior can cross a line. It's one thing to ignore or decline an advisor's recommendation. But if the client insists on actions that violate the law or that the advisor deems unethical, ending the relationship makes sense.
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