Advisor at Risk

Ellen Bessner

Ellen Bessner is a well known, leading litigator with commercial litigation firm Babin Bessner Spry LLP. Her more than 20 years of experience includes defending investment and insurance industry participants, including dealers and individuals at all levels of courts.

Changes in fashion are a reflection of how much people change — and why you should meet with clients annually to see what’s going on in their lives

By Ellen Bessner |

Recently, an advisor asked me, "How often do I have to meet with my clients?" I advised him that it's wise to meet with your clients every year. This is not a regulatory requirement nor is it necessarily "best practice," but it is good for business. He challenged me, asking, "Well, have you changed in the past year?" I didn't hesitate for a second, rebutting his presumption, "Absolutely, and you did too!" In particular, I was looking at his brightly coloured striped socks when I said this and asked him whether he wore such socks at this time last year. In fact, men's fashion has now extended to charging upward of $50 for socks that look like they were made for teenaged girls. Who would have anticipated only a year ago that this advisor would now be wearing these socks?

What I'm getting at is that people change. In fact, they're changing more than ever before — and life moves more quickly than ever before. Case in point: not nearly as many people remain at the same job for their entire lives as they once used to. People change their jobs frequently, with less commitment to their employers than they've ever had. And a change in employment — even if the salary is flat — requires the advisor to examine the situation to ensure that there are no other changes and to identify if the client is in a more or less secure financial situation, as a result. As well, people don't necessarily remain married to the same person for their entire lives either. Divorce can be expensive and lead to both spouses' financial situations changing. In addition, having children can impact someone's financial situation; and moving residences can have an impact on health issues as well.

Even if the client's personal situation has remained consistent, what about his or her attitude toward money or values? Has that shifted? An event in a client's life, such as losing a close friend or family member or even short of that, a medical health scare, can change a person's outlook. I remember a colleague of mine once told me that she and her husband went to a funeral of a close friend and within two weeks, they sold their small house and bought a bigger one with a swimming pool, "Life is too short to wait" was her renewed view.

Once, a client advisor of mine challenged me, saying: "But my clients don't change, they are old." But there are now multiple decades of retirement now that people live longer; the average age is 82 for women and 78 for men according to Statistics Canada. Some people retire as early as age 55 and others work until their mid-70s. In fact, people might stop working, but because they're still healthy, they may work for a family member or start a hobby that leads them to make more money in retirement than they did at their previous job. Or, they might start to travel to exotic places. These are two extremes; one places the client in a financially better, and the other in a worse, situation. Thus, it's just as important for advisors to know their clients' plans as it is to monitor their financial situation as their plans are rolled out — or not.

Furthermore, if you have baby-boomer clients, these clients are sandwiched between obligations to their grown children and to their aging parents. Isn't it better to know what these clients are doing so that if there is a change in financial situation — such as an inheritance — you'll be the first to know? Don't you want to be the one to advise them and grow your business? If the advisor doesn't know, then that is a lost opportunity to build their business.

If you think clients don't change in a year, think again. You weren't wearing striped socks last year, and neither were they.