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Know your client: From adviser to trusted partner

This video tutorial demonstrates how you can make the leap from just providing a service to being a true trusted partner.


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A successful client/adviser relationship relies on mutual trust, and starts with understanding a client’s true intent.

Establishing the adviser relationship 

Only through a deep level of client knowledge can you go from being a service provider to a trusted partner. Asking qualitative questions is just as important as asking quantitative ones. After all, you need to understand your clients as people not numbers. Try sparking a conversation with some of these questions; you might be surprised by what you learn.

- What was money like growing up?

- How do you define financial success?

- What is the biggest financial concern you are facing in your life right now?

- What is a goal you have yet to accomplish?

Childhood experience shapes the most individual attitudes and beliefs about money. Understanding the people, places and events that have shaped your clients’ financial story will prove invaluable in building their trust.

This varies depending on your clients’ definition of financial success. So, emotional factors are very much a priority in determining what areas of your clients’ financial life need the most attention.

Understanding your clients’ underlying principles and beliefs is also integral to providing them with the kind of advice that’s right for them.

Once you understand your clients better as individuals you can focus on planned or unplanned life events that involve financial implications and what they mean for your client.

Exploring your clients’ aspirations and how these goals fit into the bigger picture of their lives prepares you to work together towards their financial goals. A true financial planner prioritises achieving their clients’ financial goals with progress measured against these goals rather than arbitrary performance targets.

The second part of knowing your client goes beyond time horizons and risk profiles and entails putting yourself in their shoes. Go fact-finding, unearth the details about their current state, behaviours, family situation, goals and progress to date.

Start with your clients’ total net worth in the form of all static assets and liabilities. 

You’ll also need a detailed breakdown of their current investment portfolio. Finally, generate a cash flow statement for them comparing all income and expenses.

With your clients’ life goals in mind, you can begin to define their financial objectives and categorise them. This might include targets such as retiring, buying a new home, or sending a child to university.

Now you can show your client where they stand in terms of actually achieving what they want. Map the current state against their long-term goals and identify any gaps. Run a straightforward simulation of expected retirement income. Compare their liquid assets to their liquidity requirements and see how they fare. This information is key to the plan you will eventually develop.

Of course you need to be realistic and honest about the achievability of their goals. If need be, explain to your clients how they can adjust their goals, spending habits or contributions if needed.

What have we learned?

So, we can now see that getting to know your client properly can make the difference between them seeing you as a mere service provider or as a trusted partner.

Investment risk information:

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested. Past performance is not a reliable indicator of future results.

Other important information:

This video was produced by Vanguard Asset Management, Ltd. It is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.

If this is to be used on third party websites for an audience of professional investors as the submission suggests I would also include the for professional investors disclaimer at the top.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.

© 2018 Vanguard Asset Management, Limited. All rights reserved.