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How Top Advisors Influence Clients Without Breaking the Rules

The best advisors challenge their clients and pressure them to make difficult decisions that will benefit them later in life; not only are these advisors the most effective, they are seen as the most likely to be looking out for their client's interests

The most successful financial advisors are those that challenge their clients, teach them something new, and motivate them to make decisions about what to do with their savings. CEB research shows that these “wealth challengers” outperform other types of advisors, such as “relationship builders,” and that one of their hallmarks is their strength at pressuring clients to make a difficult decision.

When CEB provides this advice to its financial services members, they often question the apparently “pushy” nature of the wealth challenger role, particularly given regulatory and litigation risks today. Some question the wisdom of recruiting people with these types of skills (or helping them acquire them), especially in light of new and existing regulations ranging from the US Department of Labor’s proposed Fiduciary rule to the MiFID in Europe.

However, a closer analysis of the wealth challengers identifies a key misconception. This pressuring is not in fact linked to a higher incidence of aggressive selling or ignoring clients’ own best interests. Wealth challengers do take an assertive approach, but they are not aggressive; they toe the line but do not cross it any more than advisors that fall into any of the other profiles.

The right kinds of pressure on a client include being assertive, tailoring the advice to the client’s financial situation, and motivating them to take action. The wrong kinds of pressure come from advisors providing aggressive advice, mis-selling them products that they know or suspect may not benefit their clients, or not adequately communicating the levels of risk in the client’s portfolio.

Pressure Equals Responsible Advice

Instead, CEB research shows that advisors who are better at pressuring clients to make difficult decisions are actually rated higher by clients than their peer advisors in peers categories such as “looking out for the client’s best interest” (see chart 1) which is phrasing often equated with “fiduciary.” In other words, wealth challengers are skilled at influencing clients in a manner that is truly in their best interest.

On top of this, managers tend to rate wealth challengers more highly on overall performance – including non-financial performance – which seems unlikely if they are in fact more likely to run afoul of regulatory compliance. Far from a liability, wealth challengers may be poised to excel in a regulatory environment that requires them to act as fiduciary.

In a competitive and highly-regulated market, wealth managers can ill-afford to reduce “advice” to simply pleasing clients or taking orders. Behavioral finance confirms that individuals often make decisions counter to their own best interests. And to differentiate, tension and influence – in the form of challenging and pressuring — is productive and highly valuable. It is one more reason the wealth challenger profile wins over others.


Percentage of advisors who are more effective at looking out for client's best interest than their peers

Chart 1: Percentage of advisors who are more effective at “looking out for client’s best interest” than their peers  Advisors, Global 2015; n=653  Source: CEB 2015 Advisor Competency Diagnostic

a = Manager rates the advisor in the top two of a 7-point scale on effectiveness at “Pressuring the client to make a decision in difficult sales situations”


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