The diverse parade of advisory clients

I typically provide a pretty standard array of advisory and investment services to my clients. What keeps the whole thing fun and interesting for me is how different the clients are. They have different financial situations, different needs and different worries. And, of course, they have widely differing personalities. Sometimes it’s good, sometimes not so good, but it’s always interesting.

One of my investment management clients was “the alternative worrier.” She would load me up with “what if” planning scenarios. “What if I lose my job, what’s the least I could make at a new job to get by?” I’d show her what that would look like, and she’d be happy — for a little while. Then she would ask, “What if we have to support our daughter for a few years?” This went on for a year or so. Then, just as I was thinking that I needed to charge them more, they decided that all the hard work was now done so I should cut my fee. I declined and they left.

Some are less than honest. One couple — prospective clients — explained how they were able to evade paying state income taxes. I didn’t invite them to continue with me. However, I did accept the charming European man who conspiratorially offered to pay me in cash — but only after making it clear that no matter how he pays me, I’ll be declaring and paying taxes on the income.

Susan was a client who, with her partner, Ellen, gradually became a personal friend. They are both therapists. I’d been working with Ellen for several years before she convinced Susan to come talk to me. At our meeting, Susan sat down, got comfortable and said “So, do you want to know my issues?” This was such an unusual beginning that I was eager to find out what she would say. She didn’t know anything about money management, but she had a very clear sense of the psychological role of money in her life and the ways in which dealing with it caused her stress. Knowing all this helped me understand what she needed from me as adviser.

When I first meet prospective clients, sometimes I’m dismayed by how much they spend and how little they have saved, but sometimes I’m impressed by how well they have done saving and investing on their own. Surprisingly, the more successful clients often don’t recognize their accomplishment: they complain that they haven’t done better, and they even apologize for not having more money.

It’s pleasant (and, I think, beneficial) for me to stop the conversation for a moment to point out their success, hoping they can take pleasure in what they’ve done instead of feeling negative. “You know, that $500,000 in your retirement account is a pretty nice chunk of money — certainly a lot nicer than not having $500,000! And by the way, the money didn’t just climb into the account on its own, so you should take a moment to pat yourself on the back for having created all that wealth.”

I had one such first-time meeting with Raoul and Alicia. They were in their late 50s and were just starting to think ahead to retirement. Raoul had been managing their investments himself. I think he was a little apprehensive about what I would say about their finances. In fact, I thought he had done extremely well, mostly just by saving diligently into retirement accounts and taxable accounts, so I was particularly complimentary. They left the meeting looking happy. About an hour later, Raoul called me. “Don’t tell Alicia I’ve called,” he said. “But I just had to thank you for what you said at our meeting. Every man wants to be a hero in front of his own wife, and you made me into one!”

New clients often want to know how their portfolio size “compares to everyone else’s.” Inevitably they are richer than Mother Theresa and poorer than Bill Gates (though I don’t say to them this unless I’m confident they’ll laugh). I might mention that I have clients who make a lot more money but aren’t in nearly as good shape because they spend so much. It’s an opportunity to steer them away from a competitive view of finances to a more personalized assessment. “What really matters is whether you have enough money to support your needs in retirement.”

One of my first consultation clients, long ago, was a social worker approaching retirement. I got her financial information at our first meeting but — being new at this myself — somehow neglected to ask her current salary. When I did my analysis, I calculated that with Social Security and her limited savings she would have (as I recall) about $27,000 a year available in retirement, adjusted for inflation. This seemed like such a small amount of money that it made me anxious, and I worried about breaking the news to her at our next meeting. However, when I showed her my calculations, she was delighted, and said, “Great, that’s more than I make now!”

[More: Taking a pass on troublesome clients]

Michael Broad is a financial planner and investment advisor in Newton, Massachusetts. Got a good client story or problem you’d like to see in a future column? Email Michael Broad.

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Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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