There’s a marriage-counselling aspect to hearing people talk about an unhappy relationship with an investment adviser.
Sometimes, you wonder if the relationship is salvageable. An example came up recently when a reader asked about an adviser he and his wife have had for about 10 years. Their account is valued in the high six figures and contains about 30 different securities according to a low/medium-risk profile. The fee on the account comes in at 1.25 per cent.
“We meet with the adviser once per year and rarely hear from him (once or twice yearly),” this reader writes. “He seems peeved if I ask questions.”
There’s more. The adviser mentions over and over how well this client’s account is doing but provides little help in making sense of the numbers. Bottom line, this reader says the adviser “seems to have lost interest in our account.”
That would be my conclusion as well. An adviser who is affronted by client questions is an adviser who has mentally checked out. The same applies to the lack of contact and discussion about what the client owns and how it’s performing in the context of the past year’s dramatic events.
This reader asks about getting a second opinion on his portfolio, which seems reasonable in the narrow sense of being uncertain about how his investments are performing. The risk in doing so: finding out that the portfolio is performing adequately or better. Because even if the portfolio is okay, this client-adviser relationship is not.
Strong advisers are actually happy when clients ask questions. They want clients engaged and curious because it makes for a more effective partnership. Also, strong advisers don’t tell clients how well their accounts are doing – they show it by connecting portfolio returns to progress in working toward financial goals.
In a good client-adviser relationship, there is communication. There doesn’t seem to be much of that with this reader and his adviser, which leads to an observation. In this particular account, the adviser’s main interest seems to be collecting that 1.25-per-cent fee that he shares with his firm.
A marriage counsellor might suggest two possible avenues for this client – hash it out with the adviser to come to a better understanding of the service level expected, or break it off and move on.
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