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Secrets of Success: How To Convince Clients To Share Relevant Information

Most advisors can tell you that clients don’t always share all their personal financial information. No surprise there. The real questions are how many and why?

A recent report from Securian Financial Group can shed some light on the first one. It surveyed 720 consumers who use financial advisors and found that almost three in 10 (29%) have not been completely honest regarding things that could affect their finances. The results are published in a report entitled Client secrets: What people don’t tell their financial advisors.

Moreover, a large portion of those who withhold critical financial information appeared to fall in many advisors’ target markets:

• Nearly one-third are pre-retirees and retirees. Two-thirds are 40 and older.

• One-fifth are affluent, with $150,000 or more in annual household income, or mass affluent, with $100,000 - $149,000 income.

• Of those who are employed, two-thirds are in professional or managerial careers.

 Why They Keep Secrets

The why question gets more complex. More than half (52%) of those with secrets said the information was too personal. Another large group (45%) felt their secrets were not relevant to their financial strategies and, therefore, didn’t need to be shared. These responses suggest a lack of understanding about the benefits of holistic planning and a need to raise awareness about the risks associated with secrecy. Embarrassment was another reason why one-fifth of the respondents did not share personal data.

“They may not realize it, but personal matters can profoundly affect a family’s financial stability,” said Michelle Hall, manager of market research in a statement. “Health and marital difficulties rank high among the critical subjects clients do not discuss with their advisors," she added. More than one-fourth (25%) carry debt their advisors do not know about.

Some people may hold back because they simply don’t want to hear their advisors’ response. When asked what changes their advisors likely would recommend, half said increase savings or reduce spending. One-quarter said their advisors wish would be to create new financial plans.

Rich Preuss with the Healy Group in South Bend, Ind., was not surprised that 29% have not been honest. “You have to understand what’s important and what’s driving them,” said Preuss, who has been a financial advisor for 31 years. He said, however, that trust is a two-way street. “I make sure up front that they know I can only help them as much as they reveal to me,” he said.

Joel Twedt, of Twedt Financial Services based in Lake Mills, Iowa, uses the same two-way street but often patiently waits to see any oncoming traffic. “Some people are embarrassed to provide information so I don’t ask. Once they get comfortable, it’s amazing what they reveal,” he said. “Quality advisors are counselors,” he added. “It’s not just about the clients’ money: It’s about their dreams, their fears, their families.”

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