“This book is a legacy that we want to leave to people at the end of our career”, say the authors of the work entitled From wallet to wallet, released last fall.
“We see books that explain how to become a millionaire or specialized books for investors. Ours falls between the two. »
Facilitate communication with customers
Above all, they want to help readers be better equipped to engage in discussion with their advisor during quarterly or annual meetings.
“During these meetings, the advisor often wants to show off his managerial skills. During this time, the client feels uncomfortable showing that he does not master the subject,” says Bertrand Larocque.
Marc Saint-Pierre, a mutual fund economist and institutional finance professional, came to the same conclusion.
“Clients don’t usually care about finance because they don’t understand it,” he says.
Clients regularly asked him to refer them books to perfect their financial education, “hence the idea of writing a guide explaining in clear language the key steps to manage one’s finances”.
Essential topics
The book brings together essential topics in wealth management, from RRSPs to TFSAs, including portfolio diversification, different types of investments, interest rates, inflation and managing emotions.
This last topic is particularly topical, as disruptions in the markets can make it more difficult to communicate with clients, due to falling yields. Emotion then tends to take precedence over the rational, note the authors.
They see the current crisis as an opportunity for advisors to discuss their objectives with their clients “and confront them with the implications and consequences of their decisions”.
Returns vs Investor Profiles
Marc Saint-Pierre considers that the investor profiles offered to clients are “imperfect and partial tools”. Rather, he believes in the efficiency of performance calculations.
“An investor profile can help define the client’s objectives. But the main role of an advisor should be to enable the client to obtain the return that he really needs to achieve his objectives,” he illustrates.
For Bernard Larocque, the client also has important work to do on his side by trying to get to know himself better and define his expectations and needs. A chapter of the book is devoted to this subject.
“Where is the client at in his life? Is he happy? These are the first questions you should ask him,” says the financial planner
Building trust with customers
On the eve of retirement, he has advice for the next generation: devote significant efforts to developing a relationship of trust with clients.
“The role of an advisor is not to beat the market at all costs, but to do better than the client could do himself. Important advice in the age of robo-advisors and the self-directed investment craze.
To illustrate the importance of listening to the client, Bertrand Larocque cites a case experienced during the 2008 financial crisis. For a couple of clients, the spouse had decided to quickly liquidate her portfolio as soon as the market had fallen. The husband had opted for his part to maintain his positions.
“He contacted me every week to ask me for news. His attitude showed that he was very concerned about his investments. »
The advisor offered the client to put his assets in liquid guaranteed investments, which greatly relieved him.
To build a relationship of trust, you have to know how to go back to basics, say the authors, by rebalancing portfolios as needed and relying on historical returns to explain recommendations. It is also more than ever necessary to know how to listen to customers.