Be a part of what matters to your clients.
Last fall Mitch was asked to speak at a financial
planner's client appreciation banquet that was close enough to home so
that his wife could come along. He was there to deliver a speech, but
said that the prefacing comments delivered by the planner, Marty Kurtz,
was one of the most touching, transparent and moving speeches he had
ever witnessed himself. He and his wife were moved almost to tears by
the utterly honest, from-my-soul-to-yours message Marty shared with his
clients. What he did was lay out his value proposition with as much
candor and concern as you could ever hope to hear from your financial
First, the transparent truth. Marty began by telling the 135 clients in the room what he did that really mattered. He said:
"I do asset allocation and planning reviews for all of you. And basically, you are all invested in fairly much the same way, with different allocations. To be honest, you could probably find 20 other advisors within ten miles of us who could all do a good job in these areas. We do those things and try to do them well, but that is not what I am all about."
Marty then went on to describe his real value proposition. "The planning center was opened because the world is more complex--and we're all just one minute away from chaos. What we do is a risk management strategy for our lives."
Marty went on to tell them that he believed they came to him for two reasons: 1) perspective; and 2) direction and understanding. And to emphasize the second point, he accentuated his own purpose by saying, "The real value I want to bring to you is to know what really matters to you and to be a part of that."
During his presentation, Marty did something else Mitch had never seen before. He played a slide show of the work that his daughter had undertaken with preschool children. He told of his daughter's mission in life--and introduced her to the applause of his clients. Marty wasn't acting the part of the all-knowing financial planner, but the part of a wise advisor who chose to be real and share something significant from his life with his clients.
Marty's client gathering felt more like a family reunion than a client meeting. Marty had no doubt succeeded in building a community--not just a business. There are three very important messages that financial planners can take from Marty's approach:
Managing portfolios is not a unique form of differentiation.
Understanding what your clients really want--and being with them on their journey--is what financial life planning is all about.
Connecting with your clients (perhaps by sharing your own experiences with them, as Marty did at this gathering) is a key to successful client relationships.
Marty was not concerned about disclosing his role in the investment process. As he told his clients, many capable people can manage their assets. As we have written before, claiming that you are able to deliver superior returns is a formula for client dropout. At a recent talk to a group of financial advisors, Roy was discussing this point. "There are many services we provide for our clients," he told them, "that are much more valuable than the investment advice we give."
After the talk, a planner approached him and asked, "What is it, other than portfolio management, that we can do for our clients?"
We would like to refer that advisor to Marty for the answer.
As Ross Levin has written, "There are a number of people out there calling themselves financial planners who are probably not really doing financial planning. They may be doing pieces of the plan, but they are not trying to discover what the client's true motivations are. They may excel at some of the tactics, but they may lack the willingness to dive deep into the client's personality to try to make sure that the plan is unique to the needs of the person for whom it is being developed. These practitioners serve a useful purpose and provide a service, but they can mess up a client. They can get in the way of what a financial planning relationship can be like."
Nothing can be more important than to help our clients discover what is most important in their lives. As Olivia Mellon, Ph.D., tells us, it is rare for clients to verbalize what is really important to them if we simply ask, "What are your goals?" Therefore, a discovery process that goes beyond superficial questions such as "When do you plan to retire?" is necessary if we are to fulfill the promise that is at the core of Marty Kurtz's practice: "Know what really matters to your clients--and be a part of that."
Since it is our job as financial planners to help our clients achieve their goals and financial success, the best recommendations we can muster with all of our technical expertise will do little good if they are not implemented. Roy has discovered that no matter how compelling the numbers may be, some people may not implement the steps they need to take to get what they say they want out of life. As Marty knows, connecting with your clients can often make the difference between well-intentioned recommendations that are never implemented and changing your clients' lives.
Roy's clients, Richard and Rita, were retired and had a net worth of more than $12 million. Despite this fact, they did not have enough money to maintain their lifestyle for the rest of their lives. Only $3 million was liquid, and they were spending more than $350,000 a year. Surely they were on a collision course and knew it--yet, they seemed unwilling to implement the recommendations that would improve their financial condition. It was obvious that they needed to either reduce their spending or sell some of their assets. A Monte Carlo simulation demonstrated that their current course would have virtually no chance of success. Roy's initial discovery process did not reveal to them or him why they were reluctant to change their ways.
At one of Roy's meetings, he shared some personal information about his life with them. He discussed issues he had about money, and some of the steps he had taken to improve his situation and change his behavior. When they returned for their next session, they told Roy that they decided to sell one of their homes and reduce their expenses by $50,000 a year. Their chances of success improved from 12% to 86%. When Roy asked what had made them change their minds and implement his recommendations, Richard answered, "At our last meeting when you shared your story with us, you became a human being. Rita and I discussed our situation when we got home and decided that it was in our best interests to follow your recommendations."
We may not always be able to predict what it takes to connect with our clients. We only know that doing so is essential if we are to be dream facilitators. Sharing Roy's story was the catalyst for Richard and Rita.
Great financial planners--true financial planners--don't engage in games of pretense. They don't hang their hats on functions and processes that are a dime a dozen in the marketplace. Financial life planners connect at a deeper level than asset allocation or financial strategies can ever hope to touch. They connect at the heart. The value proposition that connects with the heart is not easily threatened or broken.
Roy Diliberto is chairman and founder
of RTD Financial Advisors Inc. in Philadelphia. Mitch Anthony is the
author of Your Clients For Life, The New Retirementality and Your
Client's Story, and is a regular keynote speaker at industry events.