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A good client-advisor relationship often comes down to ‘comfort and fit,’ which is up to the advisor to work on.

drazen_zigic/iStockPhoto / Getty Images

Financial advisors often take pride in helping Canadians establish their nest eggs and in managing their investments, but how often do they step back and ask themselves, “Does my client actually like working with me?”

Portfolio performance is important, but advisors today need to be more well-rounded if they want to attract and retain clients, says Afsar Shah, a partner with The Personal Coach, a consulting firm that specializes in working with financial advisors, in Waterloo, Ont.

“Advisors’ business models have changed over the past several years,” he says. “I’ve seen an increasing number of them become much more client-centred and service-focused, as opposed to advisor-centred and product-focused. ... It’s less transactional and more trust-based.”

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A good client-advisor relationship often comes down to “comfort and fit,” says Mr. Shah, which is up to the advisor to work on. “The relationships have to be much deeper and much richer and much closer in order to provide the solutions that most clients are looking for.”

What clients say

Susan Leadlay came across the independent advisor she wanted to manage her and her husband’s money at a personal finance seminar in 2002, hosted by her husband’s then-employer, Nortel Networks Corp.

“I was blown away by his knowledge,” says Ms. Leadlay, now a retired teacher who has been married to her husband, Brian Leadlay, for 46 years.

At the end of the seminar, she asked the presenter if he took private clients. The advisor politely told her the seminar wasn’t intended to drum up business, but instead to teach employees and their families more about finances and investing.

Ms. Leadlay persisted. “I said, ‘That’s fine, but do you take on private clients?” He said yes and she asked him for his card.

Almost 20 years later, the Leadlays continue to work with the same Ottawa-based fee-for-service advisory firm. It’s not just the independent business model they prefer; the couple also has confidence in the team’s expertise and ability to communicate finance and investing topics clearly.

“I am so happy with the fact that I have learned so much,” Ms. Leadlay says. “The advisors were, and still are, extremely approachable, knowledgeable and so highly qualified. My husband and I feel like we can trust them.”

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The Leadlays also appreciate that their advisors keep in touch with them on the progress of their portfolio regularly, including during the latest market downturn last year.

“The advisors keep us fully informed at all times about what’s going on,” she says. “We don’t feel like we’re alienated; we feel we are part of the team, working toward a common goal.”

The Ottawa couple’s portfolio has also performed well over the years, enabling them to live comfortably in retirement.

“They were able to help us fulfill our goals,” Mr. Leadlay says.

Jay Seabrook, an investor in Kelowna, B.C., chose his current financial advisory firm in part for its transparent fee structure and strong communication with clients. He also likes that the Vancouver-based firm educates its clients through frequent events and blog posts – and checks in with him regularly in good markets and bad.

“These kinds of things are really valuable,” says Mr. Seabrook, co-founder and chief operating officer at the Enriched Academy, which offers financial education services. “With many advisors, you’re probably talking to them maybe once a year – and the fee structure isn’t that transparent.”

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Mr. Seabrook is also loyal after the firm took him on as a client about 10 years ago, even before his net worth met the minimum requirement. The firm saw potential with his investment goals, which included investing in residential real estate alongside stocks and other securities.

“There’s a huge difference between what you get [in terms of service] as a higher-net-worth investor,” Mr. Seabrook says.

He also likes that the firm invests in a lot of different assets, which helps to diversify his portfolio. It also has a good track record when it comes to experience and portfolio performance. What’s more, his advisors also invest in many of the same assets they recommend to their clients.

“I would look for someone ... who’s invested in the same things you are,” he says.

Trust is top of mind

Mr. Shah has helped several investors find and choose an advisor and says trustworthiness is often at the top of the list.

“Without trust, nothing really matters,” he says. “At the end of the day, what investors are looking for more than anything, is someone who can give them the peace of mind that their financial affairs are in order, well thought out, and that they’re well looked after.”

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As such, advisors need to be able to communicate financial and investing topics to clients effectively and relate these topics to their own circumstances.

The quickest way to lose a client, Mr. Shah says, is to not deliver on expectations around services.

“It’s not all about investment returns,” he says, “It’s about relationship management. It’s about doing what you say you’re going to do. It’s a full-contact sport and you have to be communicating well with your clients.”

Another way advisors can better manage relationships is to be “integrators” who work with clients’ other professional service providers, such as accountants and lawyers, to help them with their broader wealth management and estate plans, Mr. Shah says.

Finally, it’s also important for advisors to have a succession plan, and share those details with clients, especially as advisors get closer to retirement.

“Very few advisors have well-thought-out succession plans,” he says, “and it does play a role in client decision-making when they’re deciding which advisor to go to. ... Advisors need to start thinking about these issues because their clients are.”

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