I had a potential client visit the other day who was like this doctor’s patient.  The doctor asks the patient, “so what seems to be the problem”.  “None of your business,” replies the patient.  “So how can I help you?” asks the doctor, confused. “I’m not feeling well, so I want the best drug, the best one you have that will make me feel better”. The doctor looks confused, “how can I help you, if I don’t know your situation?”  Every couple of months we have a potential client who is just like this patient.  Asking for our help, but unwilling to share anything about his situation.

In  my first year as a financial advisor I used to attempt to provide information of some kind, but I quickly found it a waste of time.  I no longer work with people who don’t see us as partners.  We aren’t doctors, we admit, but it still doesn’t make any sense for the following reasons.

Firstly, there are millions of investment products available and each and every one is different.  Different levels of potential return, different risk, different currencies, different entry levels, different encashment terms, different correlations, different assets, different legal structures, different tax treatments…etc.  I think you get the picture.  Picking “the best investment” from this, whilst knowing nothing of the client makes throwing a dart at a dart-board blindfolded seem sane.  It just won’t work.  There is no such thing as “the best investment for everyone”.

Secondly, we are required, as part of the terms of our professional memberships (I’m a member of FINSIA in Australia for example) to have a fair and reasonable basis for a recommendation to a client and this requires me to understand the client’s situation.

Thirdly, it assumes that we only have products and no useful advice to give.  In many meetings I’ve commented that an interest rate on a mortgage is too high, that the bank transfer fees they are paying can be reduced, that different tax treatments on their existing investments can be achieved legally through other means.  I’ve saved thousands, sometimes tens of thousands for a client without any direct involvement.  Just advice.  If you insist on treating your financial advisor as a dodgy salesman, then that is what you will get.  If you treat them like a child, then they will act like a child.  And the good financial advisors will ignore you, to your own detriment.

Fourthly, it assumes that the advisor has no interest in providing useful or tailored advice.  That is strange actually since it doesn’t match reality at all. One of the first comments on working with people’s money I ever learnt as an advisor is “find out what they want, then give it to them”.  Let me tell you, it is a million times easier to sign a client up to an investment if that investment matches their needs and wants perfectly.  If it doesn’t match, only the golden tonsils of a gifted few can make any leeway.

That doesn’t mean we only address the ‘wants’ of a client, we also look at their ‘needs’ too.  When working with new clients, we often provide two parts to the report.  Something that addresses what the client wants to do or achieve, and then something, in our professional experience, they need to do.  Such as building a nest-egg, or diversifying their currency or asset exposure.

So here is our advice for working with a new advisor.

• Tell them directly where you are.  They don’t need to know bank account numbers of course, but the rough balances, currencies, and assets (is a property or a share?) as well as mortgages and debt.
• Next tell them where you want to go.  This is also just as important, and it might be that you and your spouse need to have a discussion after some careful consideration and thought.  Without a goal a portfolio risks drifting.  After all, if you don’t know where you are going, how can you set a plan to get there?
• Talk about your bad and good experiences, and how you normally invest.  Everyone has patterns of behaviour or habits.  Some of your habits could be good (saving perhaps) and others might be bad (laziness or excessive risk-taking).  By talking through your experiences a good advisor might be able you identify problems and mistakes you didn’t know existed, and develop a strategy to manage and avoid these from hurting your family’s fortunes.

In the end if your treat them like a professional independent partner, and they re-act in kind, then you will have gained, not just one opportunity but a lifelong guide and partner for creating the sort of future you and your family deserve.

About Caterer Goodman Partners

Caterer Goodman Partners is a Shanghai based wealth management firm established with a clear vision to provide a new level of personalized financial planning services for expatriates in Asia. Our financial advisors provide guidance for our clients in all areas of investment, specialising in managed accounts, money-market funds, retirement planning and alternative investments. At Caterer Goodman Partners, we offer our advice and experience to provide low cost, tax-effective and simple solutions to match our clients’ interests.

About Owen Caterer

Since graduation Mr Owen Caterer has worked with the Queensland Premier's Department in Trade Facilitation and then as a financial adviser in Shanghai from 2005 until 2010.  He then rose to Senior Adviser, then Business Development manager and then to Chief Investment Officer responsible for portfolios to a value of US$280 million across Asia. Following that Mr Caterer left to found his own firm with a partner in the financial advisory and wealth management area.   This focused on developing China and Asia's first fee-based financial advisory (rather than commission-based). This has grown to now have 8 staff and and managing almost US$35 million for clients throughout Asia. This business success was recognized as a finalist in the 2013 ACBA in the Start Up Enterprises category and are one of a small number of foreign managed firms to have a full asset management license in China.  Owen has also been active in the community volunteering for the Australian Chamber of Commerce in Shanghai and acting as the Vice-Chair of the Small Business Working Group (2012-2014) and as the Co-Deputy Chair of the Financial Services since 2013 until the present. They have continued to grow their business and have now been selected as a small group of companies who are platinum members of the Australian chamber of commerce. The achievement they are most proud of is their efforts to reform the financial planning industry in China and push it away from a hard-sales commission driven model to a more ethical management fee and long term customer service model.   Owen has a Graduate Diploma of Applied Finance from the Securities Institute of Australia of which he was a member as a Fellow of Finance for many years and also has an undergraduate degree from Griffith University in International Business.  Owen's interests are tennis, running and his wife and two children.  He speaks fluent Chinese, first arriving in China in 1997.