It is easy to make mistakes. And, in the financial field, it can be very easy to disturb the delicate balance of an investment or even the firm-client relationship. These mistakes can be due to many factors, such as inadequate resources, lack of information and, yes, negligence
So, whether you are dealing with clients or getting them to fill out an investor suitability questionnaire, just remember that there are some mistakes that should be avoided to ensure a smooth process and a good firm-client relationship.
How To Avoid Financial Advisory Mistakes
1. Creating Unrealistic Expectations
Oftentimes, financial advisors make unrealistic promises to their clients in a bid to retain them. They promise financial gains that can’t realistically be achieved. And it, almost always, leads to the client being disappointed when what they were promised doesn’t happen.
That creates discontent and issues between the advisor and the client that can really hurt their relationship. In many cases, financial losses happen, which can make situations even worse. So, always make sure that you are setting realistic expectations for the client and not making any promises that you might not be able to keep.
2. Poor Communication
A poor communication stream between the firm and the client can happen easily. Making the excuse that you are too busy can spiral into avoiding the client because of whatever reason. And that can lead to the client thinking that they aren’t important to the firm.
If you have made a committment to any client, then make sure that you are maintaing consistent contact with them. Whether they want to meet you or talk over the phone, you should be making time for them.
3. Failure to Revisit Expectations
As the client works with you, things change, their life changes and so do their finances. Thus, it is important to sit down and revisit any expectations and goals that you have set with a client. This can be immensely important at times, and provide a lot of clarity to the work that you might be doing.
Many times, advisors set expectations in the beginning and don’t think about revisiting them, which leaves a bad impression and can lead to reduction in work efficiency. Always revisit expectations after a set amount of time.
4. Being Less than Transparent
When you are handling the expectations of the client, you have to be completely transparent and clear to them regarding their finances and investment. After all, it is their investment that is being utilised.
Full transparency should be provided in all areas of the relationship, including any fees, commissions and percentages that you might be receiving. Full disclosure of everything helps build the client’s trust and, therefore, increase their retention rate.
5. Failure to Show Appreciation
This might sound unnecessary, but it can go a long way with the client and increase the chances of them staying with you longer and being more satisfied with the work that your advisory firm is doing. From follow-up phone calls, to lunches, and even sending letters of congratulations, everything counts. And the client will perceive these as something that separates you from the other firms out there.
A tailored experience will always elevate your firm’s status in the eyes of the client.
6. Not Utilizing The Right Risk Capacity Questionnaires
Every firm uses risk capacity questionnaires. But the question is, are you using the right one? There are many generic questionnaires out there that don’t provide the firm with a full picture of what the client is like and what their expectations and financial outlook is like. And if you don’t have all the right information to work with, that can hinder you from helping your client in the best way possible. So, you have to make sure that you are using the right risk capacity questionnaire.
Pocket Risk has the best and most effective questionnaire in the financial market right now. It is backed by Nobel prize winning academic research, and provides a firm with in-depth information about the client, so that they can work with the most information possible.
In Conclusion
Looking to utilise a high-quality and research-backed investor profile questionnaire? Reach out to Pocket Risk today and enhance your financial advisory firm’s workflow today.