It’s the holiday season and many advisors are thinking about ways to express appreciation with a year-end review and some kind of client gift. But let’s face it—these are uncertain times. There is so much we can’t control, including the macroeconomic and political landscape and historically low interest rates depressing returns and income generation. Clients are wondering if we can deliver enough value for the fees we charge, and that’s not going to change because you send a nice pen or invite them to a holiday party.
I think the best gift we can give our clients is to change how we approach them altogether. In marketing, we describe this as focusing on the “pull,” which is natural consumer demand, versus the “push,” which is often a seller’s orientation. Think about how much time our industry spends trying to get people to pay attention to our products and the investment planning process. Consider how difficult it is to get both spouses in a household fully engaged to attend, let alone enjoy, meeting with you.
We all care about our clients, so why not ask them what they really want and help them get it? In the past several years, we’ve worked with thousands of clients using our financial life management tools and system to establish a more holistic view of client priorities. We’ve learned a few things along the way that are great insights for any advisor:
1. There are things that matter more than money.
With our planning exercise, clients choose their top five priorities from over twenty different choices. While income security, lifestyle protection and a safety net are all important factors you’d see in average plans, two of the top five priorities averaged across our client base in 2015 were what you might label lifestyle versus financial goals. Lifestyle goals and money are intertwined, but most conventional planning processes take a money-first view that falls short of connecting to what’s on the client’s mind. Instead, we push what we think is important.
2. We can help people now, not just in the future.
The number one goal across over 5000 households we examined was, “Spend time with people I care about.” The number two goal was to ensure income security and a safety net, but the third goal was “Improve/Maintain health and wellness.” After that, lifestyle protection and being prepared for the unexpected completed the rankings. Forty percent of the overall goal set are things clients can start to improve right now, which are unaffected by any of the unknowns that cause so much angst and don’t need to cost any money. Rather than an exclusive focus on long term goals like retirement, why not focus on next year, next month or next weekend? That feels good.
3. You and your clients have more control than you think.
Among the many benefits of this type of planning is that you and your clients can always be making progress, even if markets are sideways. Your clients have control by identifying what they care about and then documenting plans with you to make it happen. Yes, we actually build action plans to have date night, take vacations, reduce commute times and help get them to the gym! As advisors, keeping these topics front and center and measuring performance with input from clients at every meeting keeps clients on track for the things they really care about in life.