Story Telling

Content provided by Brian Towner, CLS Separate Account Product Manager

In the financial industry there are three key components or phases in the client/advisor relationship:

  1. Proposal: Define the client’s financial goals and how the advisor can help achieve them.
  2. Client Review: How has the advisor helped the client progress toward his or her goals?
  3. What Happened?: The end or the breakup.

In general, the financial industry does a great job with the proposal phase. Many advisors can lay out their detailed, unique process and show numbers to back it up.  There’s a wide variety of technology out there that really helps advisors bring home their recommendation and show why they believe it’s better than any other. These tools allow advisors to explain where they’re going to take the client and how they’re going to get there. For example, the advisor can show them why it’s believed that international equity is undervalued and primed to tick up, or why the client should stay away from commodities.

Once the client makes it to the portfolio review phase, there are a vast amount of opportunities for advisors to complete their story and really show progress. (I’d like to note that this stage of the story could certainly be broken out into multiple smaller stages, but for simplicity, I’m going to keep it rather broad.) When it’s time for the client’s annual review, there’s often a lack of simplistic, yet visually appealing tools at the advisor’s disposal to show the portfolio’s progress and help connect the dots. Advisors sell clients on how they’ll do their best to help achieve the client’s financial goals, yet often lack a sufficient way to show if the client has achieved those goals. Currently, advisors compare clients’ accounts against a variety of benchmarks; however, because advisors don’t propose the account to the client by stating they’ll beat a benchmark, why is that their best showcase during the “client review” phase?

Technology can help change the conversation. Imagine an advisor with 30% of a client’s assets, and during the “client review” phase, the advisor is able to actually prove his or her process and show the client where he or she stands?  With that technology, the advisor can compare the client’s portfolio to the 70% of assets that are being held elsewhere (hello aggregation!), make allocation suggestions, and hopefully make their life as an advisor that much easier. Ideally, clients will see that the advisor has a proven process that provides results and would be excited to bring all of their assets under the advisor’s management.

All advisors hope to avoid the last phase, “what happened? the end, or the breakup”. In this phase, the client most likely transfers his or her assets to a new advisor, who sold them on an alternate proposal. This stage could potentially be avoided if advisors were able to better communicate to clients, in plain terms, what’s going on with their portfolio. We all know that the average investor doesn’t have an extensive financial background or understand all aspects of how the markets work – at least not as well as advisors. As an industry, it’s our fiduciary responsibility to provide tools that will allow them to understand these topics in a simple way. In doing so, clients may have a better understanding of what’s happening with their money and a reprieve from financial tensions (often fueled by the media).

There are a variety of innovative firms out there, but none of them have been able to solve this simple, yet important issue. However, here at CLS, we feel that we are making progress in the client communication process. We believe that through better client education, the “what happened?” phase could be greatly minimized. One tool that has been an important factor in this process is CLS Autopilot. Within the Autopilot program, we utilize Riskalyze’s “Check-in” feature that shows clients how they’re progressing against their simplified financial plan that they completed in the beginning of the relationship. We’re hoping to help clients truly understand that one day of poor market performance should not detract them from their long-term goals, and staying invested is one of the best ways to achieve them.


Our clients deserve more, and it’s our duty as an industry to provide them with the knowledge, tools, and support to help reach their financial goals.