“It Is All About the Relationship.”


Recently, while having coffee with a friend, I was reminded of six important words of advice uttered to me early in my career. Those six words were significant, but not for their use throughout the industry. Rather, they were central for their impact on my profession, and the portfolios of perhaps every individual investor in the country. Those words are, regrettably, “It is all about the relationship.”

Early in their career, almost every investment professional is engrained with this ideology — service the client well, and all else becomes secondary. It is the notion that process, performance, and even intellect take a backseat to kowtowing to the every wish of your client. We are told, “Don’t think, just service. Don’t learn, just service. Don’t create an expertise, just service.” From day one, industry professionals are told to make the relationship the nucleus of every portfolio. Additionally, almost every client ranks service at their top of the list of desires. So, we do just that — spend our days (and nights) working to accommodate the demands of clients.

Unfortunately, though this makes clients feel warm and wealthy, it is to the detriment of portfolios and performance. Investment advisors must begin to provide what the client needs, not what they want. And clients must begin to look beyond the bedside manner of their advisor. It is more than simple irony when investors are left wondering why their portfolio has underperformed and their advisor cannot seem to navigate today’s difficult financial times. You asked for it, and we provided — an industry loaded with professionals equipped to make you feel good; the relationship at the core of your portfolio rather than leadership and expertise.

The solution is simple. Clients should not pick an advisor based on who treats them like a king. And, advisors should not worry about what holiday basket to send top clients. Investors — look for process and performance first.  Advisors — provide leadership and true expertise above all else. And, let’s change the rhetoric a bit… “It is all about the performance.”

Jonathan Citrin is founder and CEO of CitrinGroup, an investment advisory firm located in Birmingham, MI. He is an adjunct professor of finance in the School of Business at Wayne State University.

Founded in 2003, CitrinGroup specializes in portfolio management and advises clients on investment planning.

Contact: 248-569-1100 or www.citringroup.com or jcitrin@citringroup.com.