To Financial Planners: Top 10 Mistakes You May Make With Clients

by The Wealth Conservancy | February 5, 2014

In the wealth management industry, financial advisors love to point fingers at their clients, pointing out their mistakes, making themselves feel important in the process. In magazines and online, we often see lists of the “10 most common mistakes (fill in the blank) make when they (fill in the blank activity).” For example, the “10 most common mistakes…do-it-yourselfers make when assembling a sound system; novelists make when trying to publish their first book; great cooks make when they open a restaurant; musicians make when they cut their first album;” and — “the top 10 mistakes inheritors make when they come into money.”

However, what about the mistakes we professionals make? Shouldn’t we (engineers, publishers, restaurateurs, agents, financial planners) look in the mirror from time to time? Are we afraid to embrace lessons from our clients? Do we feel threatened by the mere idea that we, too, make mistakes that make us appear less than expert?

After polling some individuals who inherited enough money to make paid work insignificant, we learned that financial planners make some common mistakes. Here is what we heard from heirs about their past experiences:

  1. They assume I knew the inheritance was coming.
  2. They assume I have been educated with regard to investments and tax law.
  3. They assume I am happy about my inheritance.
  4. It can feel like they have a hostile envy towards me.
  5. They are intimidated by my wealth.
  6. They have no respect for me because I didn’t earn it myself.
  7. They treat me like a child.
  8. Their goal is to make the wealth stay in the family forever.
  9. They are more interested in the portfolio than they are in me.
  10. They try to impress me by using their financial lexicon.

As a financial planner, maybe you’ve even made a few of these mistakes – maybe more, maybe less. Take some time to consider how you treat your clients, and examine your assumptions about them. Let’s remember that our job is to be a trusted advisor and to help our clients navigate the pitfalls of their newfound wealth. It can be a hard enough road – let’s not make it harder.

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