I was reviewing a client's account this evening. We recently agreed on a particular investment based on her financial situation. It is rare that I offer a client that type of investment as a) I focus on 401k plans, not financial planning, and b) that type of investment fits a narrow client profile.
The review made me recall an acquaintance who recently retired as a financial advisor after nearly 50 years. He sold this particular type of investment exclusively regardless of client profile. When he retired, he had 21 settled client complaints on his permanent record. I asked him about this and he stated with a straight face, that "clients see and hear what they want to see and hear". Hmm.
Looking at the goofy guy in the above photo, On the left side, he covers his eyes, refusing to see. On the right, he blocks his ears, reacting emotionally rather than thoughtfully. Together, this guy captures a persistent behavioral reality in financial advice: clients do not always process information rationally. They filter, ignore, or distort it based on bias, fear, overconfidence, or prior beliefs. They misunderstand. And in some cases, the advisor does a poor job of explaining. Whatever the case, that does not absolve the advisor—it heightens the advisor’s responsibility.
The claim that “clients see and hear what they want to” is, at best, an incomplete truth and, at worst, a dangerous rationalization. Behavioral finance has long established that investors are prone to confirmation bias, recency bias, and framing effects. But these tendencies are precisely why the advisory function exists. If clients were perfectly rational and fully informed, suitability standards and fiduciary frameworks would be unnecessary.
The silly photo illustrates the two primary failure modes. When clients “cover their eyes,” they fail to grasp risk—downside exposure, liquidity constraints, or long-term implications. When they “cover their ears,” they may hear the message but reject it emotionally, particularly if it conflicts with their expectations of return or prior experiences. In both cases, passive disclosure is insufficient. Simply providing a prospectus or verbal explanation does not meet the spirit of suitability.
A competent advisor must move from disclosure to comprehension. That requires intentional communication design: plain-language explanations, scenario analysis, and repetition of key risks in different forms. It also requires verification. Asking a client, “Do you understand?” is functionally useless. A more rigorous approach is to have the client articulate, in their own words, what they are investing in, what could go wrong, and why the recommendation fits their situation. If they cannot do that, understanding has not been achieved.
My best practice? Document this understanding with a memo signed by the client and me. This is not just prudent, it is defensible. It creates contemporaneous evidence that I did more than recommend; I educated. It also forces a moment of cognitive engagement for my client, interrupting the tendency to passively agree. In regulatory or litigation contexts, that distinction matters.
The case of the retired advisor placing all clients into the same type of investment, regardless of profile, is a textbook violation of suitability principles. It suggests "product bias" rather than client-centric advice. Twenty-one settled complaints are not noise—they are a pattern. Invoking client behavior as the explanation ignores the advisor’s duty to adapt communication and recommendations to the individual. Suitability is not a box to check; it is a process to execute.
The deeper point reflected in the goofy guy photo is this: clients will sometimes choose not to see or hear. The advisor’s role is to make that choice difficult—to present information clearly, test for understanding, and document the interaction thoroughly. When done well, this protects both parties. The client is more likely to make an informed decision, and the advisor has a defensible record of acting with diligence and care. And if the prospective client still does understand, it may be necessary to part ways. No amount of fees or commission is worth doing wrong by a prospective or actual client.
In a profession built on trust, understanding is not optional. It is the standard. And that is The Parting Glass.