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Chris Gilchrist: Knowing your client is about more than regulatory minimums

Chris Gilchrist MM blog

Many years ago I was surprised and shocked when Taxbriefs co-founder Danby Bloch told me that a good financial adviser knows his clients better than anyone apart from their therapist (though perhaps he could have added ‘or hairdresser’).

Why shocked? Because I overestimated my knowledge of other people, a common failing and the basis of most of the plotlines in soap operas, and because I did not appreciate how their attitudes to and use of money reflect everything else in people’s lives.

Years later I am more realistic about how little I really know other people. And I am convinced that Danby was right. Good financial advisers, who have spent a decade or more building relationships with their clients, do often know them better than almost anyone including members of their family.

This is not because clients trust advisers with the kind of confidences that you hear in Eastenders. Usually, thankfully for advisers’ sanity, they save those for their therapists or hairdressers. No, it is because advisers get to see the way clients respond to events that require them to take decisions.

In normal life, you can ‘know’ someone for years without ever witnessing them confronting a serious decision, and what they tell you about it later is, of course, always only part of the story, often subject to serious spin. Advisers, on the other hand, learn people’s characters by seeing what they do under pressure.

The adviser can steadily pick up clues from the client’s reactions to events in their life, with or without a financial element, that enable them to get behind the persona. Over time these cumulate to knowledge that enables the adviser to predict the client’s reactions with considerable accuracy – and I would say this is the only meaningful definition of knowing somebody well.

Now it is natural that advisers want to get to know their clients well. It helps them to make good recommendations and get clients to accept them. But why are clients happy to be so open with their advisers about things like their attitudes towards other members of their family, that they would not normally share?

I think it is a combination of factors.

Foremost, I think, is the pleasure of having someone you can talk to freely without any worry about it getting back to other people. Your adviser is your adviser, beholden to you, and unless you go gaga will act only on your behalf and on your instructions. So there is no reason why you should not talk freely about things that there may be nobody else in your life you can talk to about them.

Confidentiality (call it trust if you prefer) is a rare and precious thing, and most people do not have much experience of it. The adviser as financial priest and confessor? He is certainly not just a clerk in the temple of Mammon.

Then there is the reduction in anxiety that follows sharing problems, and the relief of not needing to know the details of tiresome financial guff because you know a man who does. And because in talking about money issues you get to understand not just those issues but more about yourself.

For these and many other reasons, advisers often end up enjoying and deserving the confidence of their clients. That is why this can still be a job with a high level of satisfaction and fulfilment. Long may that continue.

Chris Gilchrist is director of FiveWays Financial Planning, edits the IRS Report newsletter and is the author of the Taxbriefs Guide, The Process of Financial Planning


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There is one comment at the moment, we would love to hear your opinion too.

  1. @Chris – you voice experience. yours and my own, no doubt a collective one too.

    we are the Clients advocate. it is only when they face an event that we can prove this effectively whether as acting on their behalf or just listening.

    100% in agreement.

    merry christmas Sir

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