Advisors want to be the trusted advisor for each of their clients. It’s only natural. Even if advisors can appreciate the value of a second opinion, they want their advice to be considered the most valuable out of a group of their peers. But unfortunately, a number of clients choose to work with several advisors—a tricky situation for both the client and the advisors involved.
While your advice may be the best of all, it’s important to understand the reasons why clients choose this strategy before you can persuade them to work with you exclusively. Here are a few of the main reasons clients decide that more is better when it comes to advisors:
1. They want to coordinate a team of advisors with different strategies to maximize returns.
One strategy isn’t enough for some investors. In some cases, clients believe that hiring different advisors to manage different percentages of their assets increases their likelihood of financial success. This is not necessarily true. Just because their advisors have unique perspectives doesn’t mean their outlooks will work well together, especially if all of the advisors aren’t kept abreast of their counterparts’ moves and plans for the future. Keeping each advisor updated on what the others are doing is a lot of work for clients.
2. They want to hedge their bets.
This is similar to the last point, but different in a key way: Rather than hiring several advisors in order to maximize returns, some conservative clients do so to play it safe. In their minds, employing advisors with different strategies allows them to hedge their bets and protect against the likelihood that something will go disastrously wrong with their money. This is not a guarantee, of course. Different advisors working “together” can end up hurting a clients’ overall financial picture instead of helping it, intentions be damned—and that’s not even taking into account the extra fees these clients pay.
3. They’re waiting for a “clear winner.”
The decision to hire several advisors isn’t always a long-term play for clients. Sometimes, clients want to see what a number of advisors do with their money before they settle on one as their go-to comprehensive wealth manager. Think of it as a high-stakes “tryout” for that trusted advisor position.
These are, of course, not the only reasons clients might take on more than one advisor. Their reasons can be as varied as the different approaches advisors take to wealth management. But when you’re one of a number of advisors working for a client, it is key is to ask them why they’ve adopted this strategy. Their answer will give you a much clearer idea of the strategies you need to implement to overtake the “other guys” and become their go-to trusted advisor.