Mr. Blandings Builds His Dream Portfolio

Imagine being an architect for a couple wanting to build a dream house. Their sentiment and emotions would influence what they asked for, but your job  includes a need to keep them within reason (not too big (or fancy) and not to small (or modest in terms of amenities)—basically Goldilocks).

Now image that they want to argue with you about how certain features should look, about how large certain rooms need to be, about what it takes to be within code and best practices, even about structural and engineering issues. Now complicate it by making yourself somewhat unsure about some of these answers and downright ignorant about the underlying truth of, say, why certain designs will likely work better for structural integrity than others. You must win the initial bid and keep their confidence throughout the project without misleading them or giving them what they think they want without regard to the tradeoffs, the downsides.

Financial management and financial planning is a lot about being the architect and general contractor for some principal (individuals, families, organizations, et al.) who probably wants more than they can reasonably afford and wants to achieve it with unreasonable certainty. Being a financial advisor means always having to say you're sorry.

This is not a rant. Clients are trusting you with their money--potentially all of their financial wealth. For many like individual retirees this will be all their potential wealth too because they are no longer able to work. For others their capacity not to mention willingness to go back into the workforce would leave them only with a fraction of the wages they are entrusting you to earn for them with, let me remind you, their money. They may not know what they do not know, but part and parcel with that is they do not know it. 

Oh, and one more thing: you as their advisor may not know what you think you know about them. It is a continual discovery process seeking to learn and refine and revise what goals they are trying to achieve and what constraints and risk tolerances they are subject to. 

Good car mechanics know a lot about fixing cars and keeping them running well. They know basically nothing about where you should drive. London cabbies know how to get you where you want to go (in London). They cannot know if you should want to go there.

Humility and honesty are essential attributes of a good advisor (financial and otherwise). They are among the necessary conditions for potential success along with actual skill in the area of advisement, good communication, and ability to establish and keep trust. Most clients are know they want the latter qualities in an advisor (skill, communication, trust), but in many cases they give little to no importance to the former (humility and honesty). In fact those often repel rather than attract clients. Add overcoming this bias to that which separates beneficial, successful advisors from charlatans and quacks.