Real financial advisers should always have an opinion

An adviser's job isn't to offer a random selection of options; it's to assess where clients say they want to go and where they are in that journey.
AUG 01, 2016
By  crichards
I'm about to share something a little shocking. Here it comes. I think real financial advisers should have an opinion. I get so frustrated when I hear that an adviser-client conversation offered a rundown of all available options. Sort of like, "Oh, you don't like the blue one? Well I have something in green you might like better." How does that help people make better financial decisions? Our job as experienced professionals isn't to offer a random selection of options; it's to assess where our clients say they want to go and where they are in that journey. (More from Carl: How to keep clients from obsessing over the markets) Only then can we offer a specific solution that fits their needs. Let me flip things around a bit. Imagine going to the doctor, sharing your symptoms, and then the doctor says, "OK, now tell me what prescription you want." We'd be furious with that outcome! The whole point of going to the doctor is getting a knowledgeable professional's opinion. The same logic applies when it comes to financial decisions. Yet time after time, I see advisers hesitate. Maybe it feels as if you're inserting yourself into the decision-making process. Maybe it feels as if you're pushing people to do things your way. Whatever the fear or concern, it ends today. Of course, your job isn't to force people to do things just because you say so. But like a doctor, you recognize that you have a role to play. As a real adviser, you understand that getting to know your clients, asking thoughtful questions and having meaningful conversations will help you reach the correct financial diagnosis. Then, with that diagnosis in mind, you can offer your experienced opinion about what a client needs to do next. (Also: Tips for coaching clients through their financial blind spots) We know the financial world offers a ton of options to investors. On the surface, all this choice seems like a great thing. But as real financial advisers, a big part of our job is serving as a filter for all those options. It's unrealistic and unfair to expect investors to understand the pros and cons of each choice in the context of their needs and goals. That's why they've come to us. So don't be afraid to have an opinion. The people who need it most will appreciate that you are willing to share it. Carl Richards is a certified financial planner and director of investor education for the BAM Alliance. He's also the author of the weekly "Sketch Guy" column at the New York Times. He published his second book, "The One-Page Financial Plan: A Simple Way to Be Smart About Your Money" (Portfolio), last year. You can email Carl here, and learn more about him and his work at BehaviorGap.com.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.