One thing I’ve learned while giving investment advice over the years is that it’s important to understand the person behind the portfolio.
Just knowing what someone’s bottom line is — how much they’ve saved for retirement, where they’ve invested their money, how much risk they’re willing to tolerate — doesn’t tell you what their life goals are and what’s important to them.
That’s why I think an adviser needs to take the time for a deeper conversation with a client to look for little clues — and sometimes big ones — that might better reveal the best direction for the investment advice we give. For example, if we’re talking about leaving a legacy for loved ones, it’s important to know a client’s family relationships and how close — or not close — a client is to their children, grandchildren, or sons- and daughters-in-law. Sometimes, these conversations can go much deeper.
Recently, a successful, entrepreneurial couple made me realize just how important these deep conversations can be. They own a beautiful home in an upscale neighborhood, have many business interests and are not afraid to take risks.
Yet, they are not at all pretentious. They are down to earth, kind and just all-around nice people. They are the kind of clients who you really enjoy spending time with and look forward to seeing.
A few months ago, he was diagnosed with two types of cancer. Most people would have given up and just assumed their condition was hopeless. Not this man. He and his wife decided he would undergo an experimental treatment. After months of troubling side effects and uncertainty about the effectiveness of the treatments, he started to have some positive results.
He still has long way to go, but his belief and positive attitude, along with unwavering support from his wife, have no doubt contributed to his miraculous improvement. He is truly an inspirational human being. When I saw him last week, he was happy and very excited, but it wasn’t just because he was making progress at winning the battle with his illness.
He was excited because through all his pain and suffering he found a calling. His goal is to open an alternative health center where individuals can go for acupuncture, therapeutic massage, reiki, meditation and other alternative health care disciplines all under one roof. Through his journey to choose life, he has found his purpose. Success and wealth in its most humanized form. He will make it and he will open that health center; I have no doubt.
Stories like his always serve to remind me that, while charts and spreadsheets are wonderful and important, there’s also power in humanizing investment advice. Just think about it. Don’t you like and appreciate it when someone is listening to you and paying attention to your needs?
I know I do.
Maybe that’s why I’ve always been just as interested in learning about what my clients’ money means to them as I am about how their assets are allocated. And maybe it’s also why at an initial meeting with a prospective client, I’m not as interested in hearing about how much wealth they’ve accumulated as I am in hearing about what’s important to them about the money.
The answers really can affect my advice.
And when we finally get around to talking about their money and it turns out that I am not able to help them, so what if I spent some time getting to know another human being? They really appreciate the fact that I respected them and didn’t treat them like a dollar sign. Often, the best referrals have come from these meetings.
But for those who do have some wealth accumulated, these interviews provide a valuable window into them as individuals and a reminder as to why one-size-fits-all investment advice doesn’t work.
One client might say he or she is concerned about having enough to cover health care needs. I’ve had others who say the money really isn’t all that important to them because they have everything they need. But they might be wondering about what mark they’ve left in the world, and the money might represent the opportunity to leave a legacy.
I even think it’s worthwhile to ask about their interests and what items they have on their bucket lists. Do they like to travel? Do they have a favorite sports team? What do they like to read? Maybe none of that leads anywhere — but maybe somewhere in there is a nugget that can help them clarify just what it is they want to achieve with their financial strategies.
A favorite question I like to ask is what they’ve accomplished that they’re most proud of. The answers run the gamut. For some, this is about having survived troubling times, such as getting through a difficult divorce. For others, it might be career oriented, such as having established a successful medical practice. And for still others, it might be family oriented, such as one man who quit his job to act as caregiver for his second wife’s autistic son.
Finally, we get to talking about their assets and how those assets fit into the bigger picture of the life they just revealed to me.
Too often, people get caught up in earnings and performance, but on occasion you just have to take time to be a human being. When an adviser makes a personal connection with their client, it builds trust, loyalty and a long-term relationship.
Sure, on occasion this can become emotional. Sometimes in the course of these interviews there are tears, and things come out that are painful. When that happens, I have tissues at the ready.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.