Financial advisors say their clients too often become ensnared by short-term volatility and lose sight of long-term goals, according to research released last week.

Many advisors are struggling to keep their clients focused, reports New York-based Doremus Communications. They blame Web-based tools that enable investors to monitor their finances more frequently. As a result, clients worry over fluctuations that cause temporary ripples, but have little effect on long-term returns.

The report also finds that many clients lack trust in their advisors. Many fear that advisors are only recommending products based on commission structure, rather than a client’s needs. As a result, clients are becoming nervous and displaying a low tolerance for risk in the current market. Advisors respond by citing responsiveness and honesty as two critical values in their work. They say their goal is “finding the right blend of the rational and emotional that will garner their clients’ trust, and offer them financial security in the long term.” They value a personal relationship with clients, and say they want to increase the number of consultations they hold each year. “Cases where advisors offered one-on-one service is where things really worked and where business was really moving,” said Hope Picker, director of research for Doremus.

When choosing investment strategies, advisors say they are loyal to products that have been successful for them in the past. Many choose to develop a relationship with a consistently performing mutual fund family rather than chase the current top performer.

The research was based on a series of interviews with financial advisors conducted between July 2005 and July 2006. The results are part of a larger study commissioned by a Doremus client.

—Tim Chan