Trying to develop a profitable investment strategy for clients, as well as keeping tabs on the latest product offerings, is not an easy task, many financial planners say.
And part of the problem stems from within the industry itself.
"Too many people go to financial advisers who don't really know what they're doing," said Catherine Valega, a certified financial planner at Green Bridge Wealth Management.
"This can lead clients to buy products that don’t suit their overall financial well-being. If the portfolio turns down, the clients feel burnt and less likely to consult someone good when they really need it," said Valega. (Read More:Avoiding Money Death)
Balancing what’s in the best interest of the clients and wanting to keep their business often exposes an underlying conflict, said Paul Auslander, co-founder and CEO of American Financial Advisors Inc.
"The client is the boss, but there’s often tension in the relationship," Auslander said. "Our profession has a tendency to take a ‘Dr. Feel Good’ approach and not be honest and tell clients bad news about their portfolio or their choices."
A major obstacle to making clients happy is persuading them to stay away from the constant 'get rich' schemes thrown at them, said Pete D'Arruda, president of Capital Financial Advisory Group, based in Cary, N.C. (Read More:Paying for College)
"They go to a seminar on real estate investment and are promised 7 percent returns, and they forget to look at the small print and the reality of what these seminars promise," D’Arruda said. "The public gets pumped over precious metals or something else and they don’t realize it’s not a good fit for them.”
That "get rich quick" compulsion can often lead to giving in to the demands against their better judgment or throwing in the towel and letting the client go, advisers say.
So how does a financial adviser develop a good strategy for clients while using better judgement? For Michael McGervey, president of McGervey Wealth Management, it’s a give and take situation.
"We’re financial planners, and most clients are on board with what we’re doing, but we do get one who says ‘I want to buy this or that stock,'" said McGervey, who handles some 100 upper income accounts. "We’ll accommodate them and help make informed decisions. But I wouldn’t try to convince them not to do it."
For many advisers, it takes constant flexibility with services to keep clients happy, said Rob Clark, a partner at MPC, a financial planning service firm based in Orlando, Fla.
"We specialize in building diversified portfolios for clients, but we will increase or decrease asset classes depending on what we see in the economy," Clark said. “We also offer individual stock portfolios to accommodate clients that prefer stock picking."
"It’s a full time job to stay on top of our strategy — a capital preservation model with an offensive strategy," which, among other things, means "selling higher-risk portions in contracting markets," McGervey said.
Technology & Products
"But we’ve worked with developers to integrate state-of-the-art technology for this," McGervey added. "For instance, we have weekly scorecards for our securities from software tracking capabilities for the products we sell."