When it comes to financial services, investors say they want their advisors to pay attention to their needs and make it easier for them to understand products and portfolios. It’s a deceptively simple request that keeps tripping even the best firms up.
A trio of investors were put on stage and grilled over their relationship with their advisors Wednesday at the Tiburon CEO Summit. All three said they had mixed experiences with financial advisors. The biggest cause for dissatisfaction? Failing to take the time to understand what the client really needs.
Tamas S.* voiced his frustration with his Morgan Stanley advisory team who manages a variable annuity account for his wife, who is in her mid-thirties. After years of silence after the account was set up by her late father, the advisors called out of the blue to discuss the investment.
But instead of moving the funds into a more age-appropriate investment product, as Tamas assumed might be the case, he says the visit was all about selling them on a specific product.
“No questions about what’s your financial situation, what are you guys trying to accomplish, what your background is, how much do you make, what are you looking for—it’s all about let me move you over from this policy over to this policy,” Tamas says.
“Over the years, I’ve thought about how to unplug from the relationship, but it’s tough, particularly because we’re integrated with the family,” Tamas says.
Tamas added that he also has assets with a smaller RIA firm that manages mutual funds, saying that relationship was much better. But it’s still a challenge for Tamas, who says they don’t do a very good job.
“They tend to present options, but I don’t know if I always feel like they’re as insightful as they should be,” Tamas says. “We’re paying them to advise us, but I think that in reality, what we often get is a variety of options that ultimately I feel responsible for making decisions on.”
While Tamas has yet to make the switch, a lack of attention compelled hotel manager Victor F.* to switch advisors within the AXA Advisors platform. The relationship started out well with his original AXA advisor, Victor said, but noted that it had cooled in recent years, prompting him to reach out to a friend at the firm who lived nearby.
“He’s already given more financial advice in three months than I got in the last 10 years,” Victor says. “I’m a hotel guy, so I look for customer service,” he added.
Of course that doesn’t mean all advisors are falling down on the job. Joan D.* says that after a few false starts, she found a great Morgan Stanley advisor based out of Seattle. A self-described “financial idiot,” she says that she likes this advisor because he’s very hands-on, very involved.
“I think it’s because he takes the time to tell me why he’s doing things,” Joan says. “I feel he’s committed to me.”
But Joan would like to see things simplified, with financial firms making a conscious effort to make information easily understandable.
“I get a packet, this big, that’s full of info. But it’s not possible for me to understand how I’m doing,” she says, adding that this should be clearly and logically conveyed.
But before advisors start thinking that it’s all about the customer service aspects of the relationship, Joan was quick to point out that she dumped her mutual fund investments at J.P. Morgan when they showed poor returns.
“They gave me tickets to events and things like that and treated me nicely, but the results weren’t great,” she says.
Bottom line: Advisors need to provide more than a sales pitch in order to retain clients, particularly those in the high net worth space.
*Last names were been withheld to protect the identity of the investors.
