Every advisor would say their client is their lifeblood, and servicing that client is paramount. But client service means different things to different people.
I see myself as a consultant who listens to your unique financial story, asking questions that tell me more about you, and then summarises my thoughts in a short report that is emailed to you. Only then can you become a client, or walk away, for no cost.
Understanding your risk personality, your goals and your fears is the most important outcome of that first meeting. Money is often lost by mistakes that follow when an investor reacts to emotion – fear when markets are falling and euphoria when markets are rising, and the advisor must offer context and advice.
In a classic study in the US, the Vanguard group – which is the biggest money manager in the world – wanted to determine whether advisers add any value for a customer. After a massive study, Vanguard concluded that on average US advisors add 3% per year to the returns in client portfolios.
The eye opener was how this was achieved. Some 0.75% was added through asset allocation (the mix of assets), another 0.75% through selection of specific securities and investments, and 1.5% (by far the biggest contributor) by influencing client behavior.
I know this to be true. You have to have a third-party expert advising you on money, so he can stand between you and your emotions. Even I follow this advice for my clients and my own investment portfolio, meeting quarterly and monthly with a handful of experts I know well, to test my current strategies. And they use me in the same way.
This industry is not about being clever. It is not about operating from a glass tower overlooking the CBD. It is about knowledge, discipline and a sharp focus on minimizing costs for the client.