I probably shouldn’t admit this, but I had a chance while at a coffee shop to eavesdrop on a sales pitch delivered by another investment advisor to a prospective client and I took it. After the requisite 10 minutes of get-to-know-you small talk with the color brochure placed conspicuously on the corner of the table, the conversation segued into the “what are you looking for in the management of your investments?” question.
Unfortunately, I think the client gave the most common, but the most wrong answer: “You know, I really am not an investment guy. I just want once or twice a year to have an update delivered to me that shows all of my investments on one page. Maybe showing me how much they are up or down, and showing a track record of growth over time. And since I’m conservative I’d really just like something that keeps up with the market.”
The only person who loves that reply is the advisor. How hard is it to deliver a summary of investment performance on a single sheet of paper? How hard is it to print color graphs and stick fancy logos on them? How hard is it to send an update and then put the client file on the shelf for another six months? How hard is it to try and “match the market”? Not very hard at all and I guarantee that anyone with even six months experience in this business can deliver what the client said he wanted.
A better answer by the client would have been this: “I am looking for my investment plan to directly relate to the happiness I’d like to feel about money right now. I am looking for my investment plan to be tied to my goals of life experience, to my sense of financial responsibility, and to the relationships with people whom I care about. I am looking for my investment plan to help me make daily decisions about my money and my priorities. I am looking for my financial reports to be translatable from numbers into qualitative improvements in the quality of my life. I am looking for a gain to my financial knowledge, not just information.”
