The Seven Roles of an Advisor

The truth is that no one knows what will happen next in the investment markets. Some folks may still think an advisor’s role is to deliver market-beating returns year after year. But in reality, the value a professional advisor brings is not dependent on the state of markets. Their value can be even more evident when volatility and emotions are running high. Indeed, there are at least seven hats an advisor can wear to help clients without ever once having to look into a crystal ball:

1. The Expert: Now, more than ever, investors need advisors who can provide client-centered expertise in assessing the state of their finances and developing risk-aware strategies to help them meet their goals.

2. The Independent Voice: The global financial turmoil of recent years demonstrated the value of an independent and objective voice in a world full of product pushers and salespeople.

3. The Listener: The emotions triggered by financial uncertainty are real. A good advisor will listen to clients’ fears, tease out the issues driving those feelings, and provide practical, long-term answers.

4. The Teacher: Getting beyond the fear-and-flight phase often is just a matter of teaching investors about risk and return, diversification, the role of asset allocation, and the virtue of discipline.

5. The Architect: Once these lessons are understood, the advisor becomes an architect, building a long-term wealth management strategy that matches each person’s risk appetites and lifetime goals.

6. The Coach: Even when the strategy is in place, doubts and fears inevitably arise. At this point, the advisor becomes a coach, reinforcing first principles and keeping the client on track.

7. The Guardian: Beyond these experiences is a long-term role for the advisor as a kind of lighthouse keeper, scanning the horizon for issues that may affect the client and keeping them informed.

However you characterize these various roles, good financial advice ultimately is defined by the patient building of a long-term relationship founded on the values of trust and independence and knowledge of each individual. Now, how can you put a price on that?