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Investment advisers’ pet peeves

By Sheyna Steiner ·
Thursday, February 23, 2012
Posted: 4 pm ET

The financial services industry can be an unforgiving place for everyone. For every story of hapless investors being taken advantage of, there are countless untold stories from the other side: those of the rude, abrasive, inconsiderate clients and the investment advisers that have to deal with them.

It's true that in many cases, advisers are paid quite well to take the abuse, but the problem is difficult clients undermine their own circumstances. In order to get the most from your relationship with your adviser, both parties must trust and respect each other.

I spoke with one very knowledgeable investment professional this afternoon, who insisted on anonymity, to tell me what really annoys, traumatizes and disturbs advisers as well as how investors can get the most from their relationship with an adviser.

The indented text is a direct quote from Adviser X.

Changing the mandate

A client clearly expresses goals, resources and risk tolerance. Thoroughly discussed strategies are presented, client agrees, then calls and wants to know why you're doing this.

Client risk tolerance goes from what was agreed upon -- very conservative -- to 'why am I missing out on these opportunities.' Constantly changing the mandate will get a client fired faster than almost anything else. It's bad for the clients' financial health, too.

Be the hysterical investor

This is the client who is overly emotional about each and every development in the external environment.

They are someone who is jacked into CNBC like it's the matrix and constantly calls and emails.

Please do share your concerns with your adviser. But follow your adviser's advice, even if -- especially if -- your adviser recommends you consult a psychiatrist to help you learn to improve your emotional relationship with your money.

Comparison shop -- loudly

If you want to demotivate your adviser and want your adviser to appreciate your relationship less and less, make it really clear that you're constantly comparing them to other service providers.

Try to play them against other service providers by highlighting differences in fees or constantly present some other family member or friend's adviser's viewpoint as if it's relevant to your circumstance. It’s a good way to make sure that your adviser celebrates when you finally transfer your business elsewhere.

Never, ever do anything your adviser repeatedly assures you must be done

Promise your adviser, make it really clear that you believe you're receiving good advice, promise to follow it but then do nothing. Not just once but again and again for years on end.

If you think your adviser enjoys reminding you to get your trust funded properly or your will be executed dozens of times, you can take comfort in knowing that that "joy" will only be exceeded by having to explain to your next of kin why none of the things that you told your family member were part of your plan are going to happen because you died intestate.

Having a client die without a will and then watching the family trying to figure out alternative ways to accomplish the decedent's wishes is a really, really big peeve of advisers.

Casually toss around five-alarm words such as negligence and damage

Avoid unwarranted use of attention-grabbing words like complaint, complain, negligence, damage. These are words that give your adviser a heart attack.

What you don't know is the career-damaging, cascading aftermath of paperwork, regulator interaction and procedures that are required by an adviser who hears these words come from a client's mouth or via email or by letter.

Not to discourage people from having their wishes carried out or making legitimate complaints but never use language for sport. That is a surefire way to lose the trust of your adviser. The relationship between a client and adviser is built on trust, and it has to be mutual if you expect to get the most from the relationship. Scaring them into looking out for you more intensely won't be effective.

Professionals will do a good job no matter how difficult the circumstances in most cases, but it's always easier to do things the easy way rather than the hard way.
What has your experience been?

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