Process versus product

The Wealth Manager always puts his client’s best interests first. A client who wants to sit in cash during a market downtown is foregoing his long-term plan because he is uncomfortable. This is an issue of investor behavior. Part of the job of a Wealth Manager is to serve as a Behavioral Coach to clients.

Imagine if the above scenario happened in the medical industry. You go to your doctor complaining about chest pains. After a thorough exam, the doctor tells you that you are at high risk for a heart attack and you should have a procedure immediately. Now imagine telling your doctor, “No thanks,” and you’ll let her know when you’re ready. I think most of us would have that procedure done as soon as possible.

Why is it that doctors don’t compromise or have to justify their recommendations, but many of the brokers in our industry do? These “Investment Facilitators” are more concerned with closing the sale than being a trusted professional.

Wealth Managers offer a comprehensive, client-based planning process. They have a clearly defined offering and their solutions are based on the distinct needs and goals of each individual client.

Investment Facilitators primarily sell products to meet needs at that moment in time. They usually use a multitude of products to get customers.

Wealth Managers also take the time to educate their clients and talk about how their investment behavior affects their long-term financial plan. Acting as financial physicians, they conduct a thorough Discovery before giving advice, just like a physician does a thorough exam before making a diagnosis and recommending treatment.


A physician also talks to the patient about behavior — like telling you to finish taking all of the medication, even if you are feeling better after a couple of days. She explains that if you stop taking the medication, you could relapse, and maybe even experience worse symptoms than before.


This is why I talk with you about your behavior? This is why the risk assessment questions include questions like: “If market prices go down, will you bail on your plan?” Where is the point where you feel like you want to “stop taking their medicine” — when the Dow is at 10k, or maybe 9k?

A great Wealth Manager has this conversation with every client to help them stay calm and keep their long-term perspective when volatility strikes.



  1. Broker vs Fiduciary? Is there a difference? | Better Financial Education Blog - June 8, 2012

    […] into it. With that approach comes strategy … and strategy does not depend of product; instead strategy is part of a larger process. Just investing is basically concentration on product. Process is part of understanding the […]

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