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Doing Favors for Clients Is Often Worth the Trouble

By Chris Latham October 3, 2014

Twenty years ago, a longtime client who was shopping for a new car asked advisor Larry Ginsburg if he would handle negotiations with the dealers. At first, Ginsburg thought this would be a waste of his time. But since the client had been with Ginsburg for a decade and was elderly, the advisor agreed.

A couple of phone calls and a few hours later, Ginsburg saved the client $850 on the car. Nowadays, he arranges dozens of car purchases each year for clients and their families. He also helps with negotiations when they buy or sell real estate.

“It’s soft marketing for me,” says the founder of Ginsburg Financial Advisors in Oakland, Calif., which manages $200 million in assets. “I don’t make a nickel on it.” Yet the extracurricular assistance distinguishes him as an advisor, he believes, “while building a stronger client relationship.”

That logic is why many advisors say doing favors for clients is part of the job. It’s counterintuitive that performing — for free — tasks barely related to one’s profession should be good for business. And every advisor must set limits. But the extra care resonates with clients who might get overwhelmed or even exploited without it, advisors say. And it can spur referrals.

Sometimes a favor has nothing to do with the advisor’s business, according to Richard Colarossi, cofounder of Colarossi & Williams Financial Advisory Group, which manages $150 million in Islandia, N.Y. Several years ago, a woman in her eighties asked him to pick her up at a railroad station a mile from his office and drive her to a doctor’s appointment. Colarossi made the trip — to save her from physical strain, he says. She took a taxi home.

Although the advisor says he wouldn’t have agreed to chauffeur an able-bodied young man, there was more to his decision than just the client’s need. “The whole thing stems from that woman’s feeling we’d progressed to the point that we were friends,” he says. “Just how far is it going to go? I guess you have to take it on a case-by-case basis.”

Other favors amount to administrative chores for clients who can’t handle them alone, says Liz Niehaus of Truepoint Wealth Counsel. The Cincinnati, Ohio, firm manages $1.8 billion.

Recently, a retired executive buying a large new home asked Niehaus to act as go-between with the mortgage lender. This entailed gathering tax returns, helping complete the loan application and transferring funds from the client to the loan officer. Already this summer, the same client had asked Niehaus to participate in a call to a vendor holding a huge pile of the client’s stock options from her former employer. The client had a deadline for figuring out what to do with the shares, after which the state would have assumed ownership.

The advisor agreed to both requests, which together ate up a significant amount of time. It was worth it, Niehaus says, for a happy client who’s been with the firm nearly 15 years and consistently refers new business to the practice. Still, the advisor is careful to avoid what she calls “scope creep” — performing comprehensive wealth-management services for a client who’s paying for basic financial planning — without charging for the upgrade.

Winnie Sun
HR Headhunting

Doing clients a favor sometimes requires tapping into one’s own social network. As the head of Sun Group Wealth Partners, which oversees $130 million in Irvine, Calif., Winnie Sun caters to business owners and executives. In a late September meeting with two prospects, partners at a Los Angeles creative agency, Sun inquired about the workings of their company. During the talk, she suggested their operations would run more smoothly if they hired a talented human-resources manager. The partners asked if she knew anyone who could help.

Sun said she believed she had the right connections and offered to call a few people in the entertainment industry who might be eager for a new job. She found interested candidates. In fact, one applicant came through an existing client. The prospects seem likely to hire one of Sun’s acquaintances and to become clients soon themselves.

“We need to add value to our clients with something that’s not on their financial statements,” Sun says. “This is natural for me, as long as I know it won’t get the client — or myself — into any regulatory issues.”