Disruption #4: Your Longevity 

“If I knew I was going to live this long I would have taken better care of myself.”
—Mickey Mantle

Recalculate your personal financial plan. Add another 10, 20 or even 30 years to have enough money to maintain your lifestyle forever. What business decisions do you need to make today to bridge the gap?

1. Plan to work longer. This is a great business to operate for a long time, even part time. Is now the time to do what you’ve always known you should do to have the business you really want?

2. Focus on ideal clients. Your best clients are going to live longer and want to maintain their lifestyle forever. Kissing the asses of their kids in order to keep the assets on the books isn’t important. It’s much more important that you have a high-trust relationship with both spouses. Seventy percent of widows leave their advisors within a year of their husbands’ dying. That’s preventable.

3. Elevate your client experience and value promise. Embrace true values- and-goals-based financial planning. Your client needs more than asset management or “financial planning lite.” 

4. Harness technology. Machines are better at hard skills and they can help you streamline your operational efficiencies. For about $1,000 per month, you can have all the best technology to acquire and serve ideal clients.

5. Improve your “people skills.” The differentiator from other skilled humans and the ever-improving machines is strong people skills. Ask great questions, listen with empathy, make an emotional connection, build high-trust relationships, counsel individuals and couples to establish well-defined goals, elicit core values and other emotional drivers, inspire the action required to achieve their most important goals and fulfill their most deeply held values, coach clients to stick to the plan during uncertain economic times, and hold clients accountable to do what needs to be done, especially when it’s not comfortable.

If you are young or new to the business, it’s vital that you don’t let limiting beliefs about being less experienced prevent you from going boldly into the future. Be careful about older advisors passing down their limiting beliefs to you. You can build a business with higher-net-worth ideal clients right now.


Disruption #5: Your Business Model 

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” —Upton Sinclair

Upgrade from “Financial Planning Lite”: a little retirement planning, a little college funding, asset allocation and a few insurance sales. Most advisors doing financial planning lite give away the planning, charge about 1% of AUM, earn commissions on alts and insurance sales, and sometimes meet their clients in person. The cornerstone of financial planning lite is placing “investable” assets on a platform that pays the advisor a percentage of those assets “gathered.” For about three decades, this has been advisor nirvana. “If I can just get $100 million of assets under management, I’ll earn $1 million per year … forever. Cruise control!” As though the world would never move off of a 1% of AUM model. It’s moving. The movement is happening in two ways: 1. To a lower percentage. 2. To a fixed dollar fee.

Another challenge to this business model is the decreasing perceived value of investment management and performance. Why? 

1.) Much high-quality investment management is being done completely or primarily by machines. Even active managers rely heavily on computer programs to implement their investment strategies. Machines operate more efficiently than humans, so this drives down the costs. The transparency of costs is eliminating the consumer ignorance arbitrage that enabled our industry to add a 1% fee without adding much value. 

2.) People care more about achieving their goals than beating the market. If you don’t need to beat the market in order to achieve your goals, how relevant is a benchmark? Do you want to be in the controllable goal-achievement business? Or do you want to be in the predict-the-future/beat-the-market business getting whipsawed by all the factors out of your control that determine performance? Have you noticed that you can do everything “right” and still fail to beat the market? Have you noticed how hard it is to predict the future?