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Client-adviser contact: How much is too much?

Frequency and type of communication should be discussed at the beginning of the relationship, advisers say


Date: October 13, 2016

When it comes to contact between an investor and his or her financial planner, how much is too much?

Advisers often say that no number of calls and queries is too frequent. But that comes with a caveat. Constant calling for updates may mean something else is going on, and that issue has to be dealt with.

“I don’t think there could ever be too many questions,” said Rona Birenbaum, owner of Toronto-based Caring for Clients, “because a question means there is a degree of uncertainty. And one should work with the client diligently to deal with all questions.”

For most people, annual and quarterly statements, and a yearly personal meeting, are all they need. But when clients start calling once a month or more to talk about their portfolios, “I think that would be a reflection of a discomfort with the strategy, or lack of understanding about the strategy.”

It might even be an indication that the investor doesn’t trust the adviser or what he or she is doing, said Jonathan Sceeles, a financial adviser with Edward Jones. “Sometimes an individual’s risk tolerance changes. They might have said they’re okay with aggressive investments, but when they see an investment is volatile, then they change their mind and say, ‘I’m not really comfortable with this.’”

Mr. Sceeles said he doesn’t mind when a client calls him out of concern for what’s happening in the larger economy or with what’s going on with his or her account, but it means they need to have a discussion about it. “If the person is really concerned, and that persists, they will come in for a sit-down meeting with me to review whether the investment is still appropriate.”

The frequency and type of contact between investors and advisers should be discussed at the beginning of their relationship, said Shelley Smith, a financial planner at TD Wealth in Toronto.

“There are clients who are going to want more frequent contact,” she added, “and there are clients who are only interested in hearing from you when there is a major change.”

If the client forgets or fails to bring up the question of contact, she said, “then it is really something the financial planner should bring up. When you are looking for a financial adviser, you are really looking to establish an intimate relationship.”

The more proactive an adviser is in setting up a communication schedule, the less inclined a client will feel to call out of the blue, said Larry Distillio, assistant vice-president for practice management at Mackenzie Financial.

“The client thinks, ‘I’ll be hearing from my adviser in the next week or so, so I’ll bring it up with them then,’” he said. “When a client knows what to expect, that reduces uncertainty.”

Clients should always let their advisers know when they have changes in their lives, he said. It could be a death in the family, an illness, a divorce, job loss or the decision to launch a business.

“It’s the adviser’s job to help clients navigate through these kinds of life events,” he said. “They can position themselves to reduce the amount of calls that come in by fulfilling clients’ needs by asking these questions on a regular basis.”

Educating clients also plays a role in contact, he said. Many advisers like to send out newsletters or blog about changes in the economy, the market or government policy.

Along with the frequency of contact, financial planners should also discuss the type.

“They could e-mail, they could text, they could message me on Twitter – I don’t care,” said Ms. Birenbaum. “Whatever method is going to work best for them I am happy to respond the same way.”

Recently, she said, a pair of clients brought in their teenage son to set up his first investment account. When she asked him whether it was okay to communicate via e-mail, he looked at her like she was from another planet, she said, and made it clear he preferred texting.

“That just means I have to find a way to capture and retain that correspondence,” Ms. Birenbaum added.

Mr. Sceeles cautioned that some modes of communication, such as texts, WhatsApp and Skype, could be intercepted.

“So even if we make some decisions or directions in terms of your account through e-mails, I still need to give you a quick call to verify that in fact that is the case,” he said.

A recent study by Deloitte found that while 57 per cent of millennials would change their banking institution for one with a better technology platform, 82 per cent would appreciate more face-to-face meetings with their investment adviser.

Talking to an adviser about your financial goals, your income, expenses and debt load is already a highly personal conversation, said Ms. Smith. It only follows that she wants her clients to feel comfortable e-mailing or calling her whenever they like.

“Both are a question of trust and transparency,” she said, “and built on a personalized relationship.”

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