Advising in the age of self-diagnosis

Don't be threatened, it's nothing but an opportunity to get to know the client better

Dec 30, 2014 @ 12:09 pm

By Mike West

According to WebMD, I've had cancer at least three times. Whenever I'm feeling under the weather, my first instinct is to crack open my laptop, pull up a medical advice site, and begin searching. If my symptoms are uncomfortable or prolonged enough, I inevitably work myself into a frenzy about all the things that could possibly be wrong.

It is only then that I go on to seek proper medical advice.

Oddly enough, I know a lot of people who do this same thing with their finances — only instead of symptoms, they get a whiff of something going on in the markets, good or bad. Perhaps a neighbor mentions a good investment, there's something on CNBC about increased volatility, talk of investing in gold comes up at a party, that sort of thing.

At this point, the instinctual response is to search the Internet to see what that “symptom” might mean: Can they make money like their neighbor did? Is the market going to tank, wiping out their retirement savings? Should they be investing in precious metals?

It is only then that they seek the help of a financial adviser.


Sound familiar? If not, allow me to be the first to welcome you to the age of self-diagnosis, a time when the cup of information runneth over and clients often wade into an analysis of their own situation before considering a professional consultation. Good or bad, this scenario isn't going away anytime soon.

On the contrary, with the advent of the robo-adviser, it may well be the new normal. So how do we take advantage of this situation? How do we turn the information glut to our clients' — and our own — advantage?

Proudly titled “Diagnose This: How to Be Your Own Best Doctor,” an April 2014 article by Heidi Julavits tackles this issue from the medical perspective. Like many professional advisers who feel protective of the toil that went into the credentials framed on their walls, many medical doctors may be threatened by the free advice culture created by democratized digital resources like WebMD.

But “how a person understands her symptoms,” Ms. Julavits reasons, “and what prevailing symptom inspired the Internet search, could tell the doctor quite a bit. This is how the patient articulated her suffering to herself; this is how she first put it into words, before she had to form actual sentences and tell her beginning-middle-end story to another person.”


In other words, a client's discussions about news events and prospective investments aren't simply the uninformed ramblings of a person who shouldn't be trusted with the Internet at their fingertips. Rather, their articulated concerns and hopes and fears are the very stuff that advisory relationships are made of. Self-diagnosis is nothing but an opportunity to get to know the client better — a meaningful extension of the client intake process.

Ms. Julavits' point becomes clear if we consider the alternative: what does it say about the adviser-client relationship if a client sees something, researches it, comes to your door bursting with opinions, but ultimately feels unable to speak because he or she feels the need to defer to the almighty professional opinion? Chances are, that's the client who is about to take his or her business elsewhere.

A 2012 Psychology Today article paints self-diagnosis in a more negative light, arguing that it “undermines the role of the doctor — which is not the best way to start the relationship. While doctors are generally very enthusiastic about getting packaged information, it would help if you actually trusted your doctor.” In this scenario, the very act of self-diagnosis is one that undermines the adviser-client relationship because it represents an act of mistrust.

But it might be the case that the actual medicinal or financial knowledge — the cure, in other words — isn't really what the client is looking for. Sure, they want their investments to grow and thrive; they want access to the adviser's technical expertise, etc. But if that pure expertise was really the end goal, there would be little human element to the equation, and advisers would have been replaced by robots long ago.


As it turns out, clients value relationships most of all. They want advisers to hear their complaints, take into account their research and considerations, and treat them like intelligent beings who have agency over their own financial decisions.

In this way, the moment of self-diagnosis is among the rarest opportunities that an adviser is given. It's a chance to trade information and build trust, and serves as an excellent litmus test of the client's comfort with your services. More importantly, the way you respond to the client's human concerns, fears and passions doesn't just add value to your practice — it adds value to the lives of your clients.

Mike West is senior partner and chief executive of BPV Capital Management.


How do you handle self-diagnosing clients?

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