Management Advisor – Know Your Client

The contribution of the external advisors in supporting companies (on business or organizational issues) is open to a continuous dispute. As a professional in that area I would like to contribute to that discussion with the following argument; advisors need to know more about their client.

In the financial world the external advisor is kept to an increasing set of guidelines. Since the problems on the stock-exchange in the beginning of this new century, financial authorities have set out new rules for banks and commissioners and other agents that advise private clients on financial matters. The most important rule is the introduction of client profiles. Such a profile communicates the risk-attitude of the client in the investment process. In this way both the client and the bank (advisor) are aware of the risk that is acceptable. This is a strong management guideline.

Both the bank advisor and the business advisor have a stake in the advice. Banks are said to issue too much BUY advices, whereas business advisors too much dwell on the advice to change things in the business. A change in business is like a financial BUY; it will cost money and the advisor will profit from it.

“Clients are not interested that you tell them not to buy,” is what you hear financial advisors say. It is true. Buying gives hope and expectations. You are in the game and you get excited.

Another argument is that financial advisors should invest for themselves. If not, “how can they be ever good advisors?” This is another argument but there is only a small fundament for it. You could equally argue that if this is true you are facing the risk that you enter a pyramid game. You can better trust the advisor if he is neutral (and not involved). This is why there are Chinese walls; the investment side of the bank and the retail side are not connected.

Neutrality is the best position for the business or management advisor too. If you are selling a package and you advise others to buy it they should at least know that the advice is biased.

Where business advisors can increase their professionalism is in knowing the client’s business and organization. The financial advising industry has past this point, as explained previously: they know the risk profile of the client.

Advisors in business still have a way to go in this sense. There are often two camps. There are those advisors that know everything about (the) business. They have specialized on Logistics or Client Relationship Management. Others are perfectly knowledgeable about the organization, about culture or human resources. The first is the “hard” side, the second the more “softer” side.

If you are hiring a specialist than this shouldn’t matter, the specialist can serve in any area in the company. Advisors on the other hand should know or understand “the company.” This is more than a set of specializations. It is about understanding what they add up to. You might imagine that the business owner knows the business well enough. The contribution of the advisor is to explain where business and organization meet in case of a change (when BUY-ing a new instrument).

When it comes to the advise on a new investment the clients’ profile is important. Different companies will require different solutions on a similar problem. What served one company doesn’t necessarily suits another.
Financial advisors know the risk profile of their client. Management advisors should know about this (risk) profile too. And that is more than (knowing) the manager that hired you.

© 2007 Hans Bool

Uncover Your Blind Spots and Achieve Success in Your Financial Advisor Game

Many great business relationships and deals are initiated and forged during a friendly golf game. But did you know that lessons learned from playing golf can apply to running a successful financial advisor practice? In fact, there is a direct parallel between improving your golf score and improving your financial advisor business.

For those who are not familiar with the game of golf, it is scored according to how many swings, or strokes, it takes to get your ball into each hole on the golf course. The higher the number of strokes, the more room there is for improvement in your golf game.

When a golfer seeks help from a golf pro, they seek to improve their skills and have their blind spots removed so that they can play a better golf game.

Many wealth management advisors find themselves in a similar position when changing circumstances in the financial markets call for a different focus and strategy. To complicate matters, blind spots may exist that can prevent you from seeing where and how these changes should take place. Just like the golfer, a financial advisor can position their practice for success by finding and removing these blind spots.

In golf, beginning players should expect to score in the 100’s when they are first starting out. They are just learning to use the tools and skills they need to score well during play. But they can become easily frustrated if they don’t see improvement after a few games. They may be using the same clubs that professional golfers use to win a championship game but not getting the same results.

Similarly, a wealth management advisor who’s just starting out has attended the training sessions and knows how to use the tools they’ve been given but they’re not getting the same results as the advanced advisors. They need help to figure out what they’re missing in applying the tools and skills they’ve learned.

In golf, more experienced players have broken past the beginner level and are achieving consistently good scores. But they’re finding it difficult to break 90 and can’t figure out what skills and tools they need to work on to rise to the next level.

Likewise, a wealth management advisor who has a solid foundation in their practice may feel frustrated because changing market conditions call for new strategies but they lack direction on what exactly they need to do to get better results.

A consistently advanced golfer whose score is always below 90 is finding that their game is becoming stagnant. They might have broken past 80 but can they stay there? What’s stopping them from getting an even better score?

In the same way, wealth management advisors who’ve built a successful financial advisor business over the years may have reached their professional goals but feel insecure. They realize the need to position their financial advisor practice for the final stage of growth but don’t know what steps to take next.

These three golfers and wealth management advisors all have one thing in common: a need to remove the blind spots from their financial management business so they can achieve the success they desire and help their clients prosper at the same time. Great golfers and financial advisors have found that you can produce top business results if you are willing to take a step back and ask for help to find your own blind spots.

Should You Find Asset Management Advisors For Your Investments?

Some people who feel that their investments can do better if they have someone else handle it for them often look towards companies that have asset management advisors to take care of their investments for them. The people who do these often find that once they are no longer trying to figure out which investments to make and which ones should be avoided due to the passing of such a responsibility to a company and to people who do these for a living actually find themselves with more time to do more of the things that they want to do and to not worry about the money that they entrust to these companies.

Should you go down the same path yourself and find asset management advisors and professional financial managers to handle your investing and investments for you? The answer to this question usually depends on whether you can find an asset management company near you that you can trust and that can help you achieve the goals you have set yourself to attaining with the money you have saved for your investing purposes. To find the right company and the right advisor for such an endeavor, you may need to go through a number of company portfolios to see what they have to offer and you may need to talk with a few of the advisors these companies have about their possible plans for your assets. You will know whether you should get an asset management company to help you with your investments when you find the one that you feel suits you and your plans well.