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Risk & Behavior

How to Understand What Investors Value in a Financial Advisor

Our Finra-approved worksheet helps get investors and advisors on the same page

How does what investors value in a financial advisor compare to what advisors think they value? Our research found some concerning differences. Since meeting investors’ needs is essential to attracting and retaining clients, this level of discordance between the expectations of advisors and their clients can drastically impact the success of an advisor’s practice.

Here, we share a worksheet designed to help advisors bridge the gap and start the conversation.

Aligning the expectations of investors and advisors

In a previous post, we discussed the implications of a few of these differences—specifically, what the low rankings of interpersonal services mean for the industry. For example, advisors thought that having an advisor who “understands me and my unique needs” was of the utmost importance to clients, while investors ranked that attribute seventh most important on their list.

Many of the differences we found will require advisors to work closely with their clients to convey the benefit of services like personalization and behavioral coaching.

Other differences require smaller modifications in an advisor’s practice. For example, investors believe that having an advisor who can navigate the tax consequences of investing is extremely important, but advisors ranked this attribute much further down their list. Most advisors already consider the tax consequences of investing, so it may just be a matter of bringing that work to the forefront and keeping investors aware of tax-related decisions.

Do you know what investors value?

Many of these differences are difficult for advisors to grasp because they are contrary to what research shows is valuable: Many studies have demonstrated how important interpersonal services are for investor success, and yet investors consistently rank these attributes lower on their list.

These services can have a positive impact on a client’s performance, so they must continue to play a key role in advisors’ offerings. Still, it’s important to understand where your clients stand on these issues and, when necessary, help them understand their value.

Discovering where your clients stand

To help advisors understand what their clients value and to get everyone on the same page, we’ve developed a worksheet that advisors can share with their clients.

The worksheet uses a tested process that helps people look past their biases and think deeper about their values. It includes a three-step process:

  1. Investors list the top-three attributes they value when working with a financial advisor.
  2. Investors then review a master list of advisory attributes and mark the items they find valuable but didn’t include in the first exercise.
  3. Taking both their initial and master lists into consideration, investors write down a final list of the top-three attributes they value when working with a financial advisor. Many times, this new list looks very different from their initial list.

When this exercise is complete, advisors can have a better understanding of their clients’ needs and expectations. This will allow advisors to adapt to certain needs and help their clients understand the value of others.

Download our Finra-approved worksheet to help identify what your clients value in an advisor.

Download our Finra-approved worksheet to help identify what your clients value in an advisor.
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