Reactive advisors are why the industry has trust problems. It is a hot take, but think about it: if the only time you hear from your advisor is when you call them, who is really the client in that relationship?
Being proactive has never been easier
It is so easy to be proactive nowadays with technology, systems, and automations. The tools exist to reach out, check in, and stay ahead of client needs without manual effort.
The bad actors, though, just refuse to take that step. It is annoying as a client when the only time you speak to your advisor is when you pick up the phone and call them. To be paying that amount of money and not hear from your advisor until you reach out first is insane.
Proactive work is the boring part no one talks about
The catch with being proactive is that you have to set it up months in advance, and that is the boring part nobody mentions. Reactive advisors avoid it because the last thing they want to do is plan ahead to talk to their clients.
What reactive advisors have figured out is that they still collect the same fee while doing less work, because they never have to be proactive. On the surface, maybe they are on to something.
Reactive advisors damage trust for everyone
In all seriousness, reactive advisors are going to have terrible churn, very bad retention, and a thrashed reputation. The math eventually catches up with them.
But it only takes a couple of those reactive, bad advisors to create trust issues across the whole industry. Proactivity is not just good service, it is what protects the profession's reputation.
Frequently asked questions
- What is a reactive advisor?
- A reactive advisor only engages clients when the client reaches out first. They do not proactively check in, plan ahead, or stay ahead of client needs.
- Why do reactive advisors hurt industry trust?
- Clients paying high fees expect to hear from their advisor. When advisors only respond after being chased, it erodes trust, and a few bad actors damage the reputation of the whole industry.
- Why don't more advisors stay proactive?
- Proactivity has to be set up months in advance, which is the boring part. Reactive advisors avoid that work because they still collect the same fee while doing less.
- How does technology make advisors more proactive?
- Modern systems and automations make it easy to reach out, check in, and stay ahead of client needs without manual effort, so there is no excuse for being reactive.