Do you have friends who always have an excuse for why they are not succeeding? Do you know people who set goals and fail to deliver? These people often blame some outside factor beyond their control. That is not you. One of the things that makes advisors successful is the ability to overcome adversity.
Years ago, I attended an advisor training. The speaker brought up the issue where advisors come up with a business idea, then find compliance says “no” or the firm has so much red tape they can never get their project off the ground. He made this observation I have remembered for decades: “You need to succeed in spite of the firm!” Put another way, when you encounter an obstacle, you need to find a way around it. You have heard the old expression, “When one door closes, another window opens.” If you were wondering about the identity of the management guru making this observation, it was the actress Julie Andrews, famous for her role in Mary Poppins and other films.
Let us look at 12 situations that would stop other people. How does the good advisor get ahead?
1. There is never that “perfect moment” to invest. You will have clients who are waiting for all the ducks to get into a row. They want to see the Federal Reserve lower interest rates. They want to see the outcome of the election. They are concerned about world unrest.
Good advisors: You want to let clients know there will always be uncertainty. You do not need to commit all your money at once, but you can put together a plan and invest money in stages. The dollar cost averaging strategy works on this principle.
2. The investor wants to have more information. Some people might be waiting to see what statistics are being released by the government. If they don’t like the numbers or don’t see a clear trend, they want to wait for the next set of numbers. “We don’t have enough information to make a decision.”
Good advisors: Senior executives in business constantly need to be making decisions about the direction of the company, using incomplete information. You will probably never have enough information. There will be conflicting signals. E.O. Wilson, a biologist said, “We are drowning in information, while starving for wisdom. You need to help clients sort through the noise and find the relevant numbers that make the case.
3. There are no sure things. Beware of the investment that appears to be ideal for investors seeking growth. Somehow it is also ideal for investors looking for income. Amazingly, it is supposed to be ideal for clients concerned with capital preservation. This investment does not exist.
Good advisors: Sometimes a client tells you about an idea they heard about elsewhere. Years ago, it was ads on late night TV. They used the word guaranteed more than they should. They implied investing is easy. Today, you have the online resources to “look under the hood” and see what they are not telling the client. There are no risk-free investments.
4. You are going to lose clients. Years ago, we were looking for a house in San Francisco. I was not happy with the real estate agent, so I found another one. When I told the first about the change, she explained: “You are not supposed to talk with more than one realtor at a time.” As I recall, I explained: “That would mean you have a perfect business because every client you worked with was guaranteed to buy a house from you!” There will be clashes of personality. This might happen when accounts get reassigned in the office after an advisor has left.
Good advisors: You try to keep lines of communication open. If there is friction, you try to learn the underlying issue. You try to be proactive in deteriorating relationships. You might say: “Maybe I am not the right advisor for you,” and seek to have them reassigned within the office. You realize people will leave for lots of reasons. It is rarely personal.
5. You get discouraged when other advisors in the office win awards, but you do not. I read about this in a LinkedIn post recently. You work hard, but others post bigger numbers on the scoreboard. They get the acclaim, you do not. It can get discouraging.
Good advisors: I replied to their post and mentioned: “You have won in other areas. If you are an experienced advisor, you have won in longevity. You have kept your clients because you are ethical. You are earning a good living because you do business the way you prefer and clients like it and stay loyal.
6. You cannot change some people’s opinions. Years ago, I was introducing a client to the concept of international investing. (I loved the analogy at the time, if 42% of the world stock market capitalization is U.S.-based, investing only in U.S. stocks is like taking the client onto an 18-hole golf course and stopping the game at the 8th hole.) They stopped me and said: “Don’t you realize they are having problems over there?” Apparently, every place beyond our shores was over there!
Good advisors: You might make a compelling case, but if the client says, “I don’t want to do that,” you need to respect their decision. In this case, a good fit might be U.S.-based companies with household names that earn a substantial amount of their revenue from overseas operations.
7. Sometimes you have a bad day. My grandfather has a bumper sticker reading: “I did not wake up grumpy today. I let them sleep instead.” As an advisor, there are days when the weather is foul, traffic is backed up and clients are frustrated, so they take it out on you. These days happen.
Good advisors: One strategy you can use is to realize every day is a separate, unique unit. Monday’s traffic doesn’t need to be Tuesday’s traffic if you take a different route. Another strategy is to realize you are having a bad day and work on projects that do not require client contact. That way, your bad mood does not infect their mood.
8. People often want as much as possible while paying the least amount. You might encounter this problem with friends who want free investment advice in social situations. Doctors and lawyers run into the same problem. They pick your brain about stock ideas, then buy elsewhere. It is a balancing act. You do not want to be rude, but you don’t want to get into trouble either.
Good advisors: There are a few ways you can address this issue: One is explaining you need to understand each client’s larger situation before giving appropriate advice. Another is discussing stock ideas, adding the caveat “You need to have two pieces of information: When to get in and when to get out.” You can explain that is one of the ways advisors add value and why they pay for advice.
9. You will have friends who put minimal effort into relationships. This can drive you crazy. You call a friend you haven’t heard from. They say: “I was thinking about you” or “I have been meaning to call.” You have friends who are “professional guests.” If you invite them to a party, they will attend, but they never invite you over or suggest you go out together.
Good advisors: This gets away from the advisor role and into the personal side of life. Sometimes you need to assume you are the catalyst. Friendships can be like a set of scales. At times all the weight and effort is on one side. Over time, the relationship balances out. If you assume one way to look at life is people are givers or takers, if you are the giver and someone else is consistently a taker, you decide to let the relationship drift apart. If they want to make the effort to return, then you can be receptive.
10. You will lose LinkedIn connections. I am very active on LinkedIn. It’s my first activity every morning except Sundays. I have 4,336 connections. Last week, I had 4,337. Who did I lose? I have no idea. Why did they leave? I haven’t a clue. Did I do something wrong?
Good advisors: There will be people who relate to the content you post and the personalized messages you send. Some people message back and forth every week. Others, I hear from once a year. Quite a few never correspond. Occasionally, someone will message: “I really enjoy your posts. My apologies for not replying.” I’ve come to terms with this realizing there can be many reasons people drop away or are silent. Maybe their firm doesn’t allow messaging. Maybe they changed firms. Others retire. My LinkedIn tally of connections is dynamic. It is constantly changing.
11. Failure isn’t always a bad thing. In this industry, people are often evaluated based on hitting certain targets or achieving goals. On the sales side of the business, the rules can be different. I was national fund chairman for my college for a couple of years. The professional staff in the development office explained “Last year we raised $600,000. Our goal this year is $650,000.” This was during my career as a financial advisor, so I said: “No. Our goal is not $650,000. Our goal is $1,000,000.” They were very uncomfortable. I explained “We are probably not going to reach $1,000,000. We will get close. We will end up raising a lot more than $650,000.”
Good advisors: You set very ambitious personal goals. You break a big goal into lots of smaller goals. You develop a plan to get there. Even if you fall short of your personal goal, the results are often spectacular.
12. When clients wonder why they are not getting numbers comparable to historical performance. This would often happen with mutual funds, but the logic can work for stocks and other investments too. It has been said investors often want to buy last year’s winners.
Good advisors: I would explain a certain year’s total return represents how the fund performed that year. The year-to-date figure for this year is how the mutual fund has done from January 1 up until the moment you are now buying it. We need three data points. Where it started the year, where it is now and where it ultimately ends up at the end of the year or you sell it. We have the first two data points. We are waiting on the third.”
Advisors encounter plenty of obstacles on a day-to-day basis. With a positive attitude, you should be able to work though most of them.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.