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What makes a great client? Financial advisers reveal top customer traits they love (and dread)

By Morey Stettner

Openness and receptivity are attractive; unrealistic expectations and demands are not

Many investment advisers earn a percentage of assets under management. But money isn't everything. Ask advisers how they define a great client and they tend to look beyond someone's net worth. They also consider attitude, personality and motivation.

New advisers lack of luxury of being choosy. They may take all comers in an effort to build a book of business and generate revenue for themselves and their firm. Experienced advisers, by contrast, can spot trouble almost immediately when meeting a prospective client. Their mindset can shift from "I want to convert this prospect into a client" to "I want this person to go away."

"At our firm, we look more for [a prospect's] personality than their net worth," said Jenn Pena, an adviser in Littleton, Colo. "Personality is what makes them a great client more than the dollar amount" they possess.

In her six years as an adviser, Pena has found that the ideal client exhibits two traits:

Openness: It's easier to connect with individuals who freely share their hopes, dreams and fears. The more they open up, the more Pena can learn how they view money and how she can help them meet their financial goals.

"It's their willingness to engage in an open conversation rather than answer our questions with just a yes or no," she said. "It's a curiosity to explore things they don't know or haven't thought about much."

Receptivity to advice: Know-it-alls make terrible clients. If they bask in their self-perceived wisdom and repeatedly interrupt an adviser to contradict what they hear ("No, you're wrong about that..."), it's a red flag.

"The best clients value our insight and our knowledge versus arguing or being closed off to it," Pena said. "There's a willingness to hear a piece of advice and go out and implement it."

Some clients start off open and receptive, but change later. Pena cites one client who began asking about alternative investments. "I'd reply with what I thought and she'd do the opposite," Pena recalled. "It became almost rebellious. That's when trust is lost."

Advisers may not love a prospect's personality, at least at first. But someone who's arrogant, selfish or curses too much isn't necessarily a dealbreaker. More concerning is a clash in expectations. Clients who begin the relationship with an unrealistic sense of the adviser's role are doomed to dissatisfaction.

"We set expectations of what we do and do not do," said Aaron Leak, an adviser in Rockford, Ill. "In our initial needs analysis, we find out what their goals are and if we can meet those goals."

In rare cases, investors say they want to hire an adviser who will consistently beat a benchmark index, such as the S&P 500 . Or they say they want their adviser to produce a specific return year after year. "That's not a goal to me," Leak said. "That's chasing a return that may not be there."

Advisers' job satisfaction largely comes from helping clients attain their goals. So if prospects are unable or unwilling to articulate their goals, the relationship may prove mutually unsatisfying.

"If somebody can't see past tomorrow and get a clear idea of what they want, that's hard," said Tim Harrison, a certified financial planner in Omaha, Neb. "We'll work with them and try to pull them along, but I can't paint a vision for them unless they co-create it and we meet halfway."

Plus:If your financial adviser is giving you fits, it might be time to break up (link)

Also read: Why direct indexing is gaining traction with financial advisers and their clients (link)

-Morey Stettner; 415-439-6400;


(END) Dow Jones Newswires

06-09-21 1418ET

Copyright (c) 2021 Dow Jones & Company, Inc.

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