As a financial advice firm working to solve the thorny issues of our clients, which advice path should we take? Do we roll up our sleeves and tackle the pressing issues presented by a client straight away? Or do we take the road less travelled? I recently stood at that fork in the road, looked my hard-won clients in the eye, and delivered my advice.
First, does the following sound like it could be you in response to a financial advisor?
“I really just want to get past the next few years of significant financial re-building since I left my former partner. Then I’ll be ready to explore other options. That’s just my reality at present. OK?”
The new client meeting was stalling.
He was an entrepreneur who was used to days of back-to-back project negotiation meetings. He’d come into this meeting with clear objectives.
I sighed. Reflecting on how long it had taken since the original referral to firm up this meeting date and time.
It had taken equal determination for me to persuade him that all initial meetings required him to bring his partner in life as well.
The client’s partner was equally busy, and being less involved in their joint financial aspects, he’d queried why a visit to a financial planner was something he needed to be there for.
I silently drew breath. I knew what I had to say next.
I have trained myself for these types of ‘tough’ conversations, but they still are not easy to have.
I knew when the advice got tough, the words I was about to say and the manner in which I said them would have a significant impact on my potential to engage this couple as advice clients – and more importantly, seriously help them improve their situation.
Taking the Road Less Travelled
At times like this, I could have taken some ‘easy’ options:
I know some industry peers (including reputable, good advisors) who would make a practical start, to ‘start small’. I could have allowed my busy prospect to take the lead in seeking advice on effective tax and estate structuring: some tax work, estate work, some new insurances and possibly some finance.
Despite the easy road opening up in front of me, this wasn’t an option. Feeling like I was taking the road less travelled, I reminded myself of others in the old industry I wanted to distance myself from.
I also knew my tough advice was why my small but growing group of advice clients paid me.
Pressing on I reminded myself of the values that established our boutique advisory firm.
“I’d like to pause that conversation for just a moment.
You both may not have expected my approach and the questions I ask my advice clients every year.
My role with my clients is to help them best achieve what’s unachieved…while helping them manage the unresolved. This is both short and long term.
It’s fundamental that we, or any good advisory firm, will help you manage your immediate cash flow, tax, and structural issues. And to manage that without any remuneration tied to any specific advice, profit or platform.
However, solving these issues without the context of your longer-term best interests, aspirations and complexities is not, in our opinion, professional advice. We realise that sometimes these discussions about your unique long-term aspirations can themselves be a conversation that you may not be ready for.
We believe these conversations, which many people aren’t prepared for, are fundamental to every advice relationship. This isn’t a pitch for more tax, insurance or estate work.
This is about your life.”
The prospect proceeded and became a client.
In 2016, we have a decision to make:
What advice model do we want to be famous for?
One we want to deliver? One our clients want us to deliver? Or a bit of of both?
While banks, insurance companies, and similar financial services institutions continue to sing their tunes of being client-focused, the reality of how they are paid is different. They are full of talented business people, marketing, product and distribution people yet no financial advisers capable of the above conversation. They are not providers of professional advice; theirs is a product pitch.
While institutions continue to be rewarded for product or platform opportunities, they may ultimately be better positioned by a return to their origins as providers of excellent financial platforms.
Advisers having dialogues like the one I described above are professionals.
Professionals who are willing to act in their clients’ best interests. Even when clients have their own pre-conceptions from their product-influenced financial experience.
Professionals who don’t do product pitches. People who pitch everything they can at being famous for creating better lives for their clients.
Professionals who align how they are paid by their values. People who provide valuable advice uncontaminated by supplied products, financial platforms, or hours worked.
So what is our 2016 going to look like?
My belief is that we are a firm - or as an individual adviser in a job - working in an industry built in a different era, which is now under re-construction thanks to technology, consumers, regulations, competition, institutional amalgamations, global markets, and our own changing needs.
In 2016, there is a new advice model where true professional advisers are paid on value of our advice.
Our surveys of our advice clients confirm the worth of having a principal advisory firm ensuring everything is in order to best achieve those goals important to them.
We are on a path to build a prosperous and great advice brand.
If our way sounds a bit different – for the crazy ones, the ones who challenge the status quo – that’s because it is. We are open for business and looking for
If we are simply not for you for whatever reason (personality, age, anything), we know a small and select group of peers we would be happy to point you in the direction of that we know follow a true advisory process. Like us.
Inspired by Jim Stackpool