Advisors: Stop acting like you're so rich.

Advisors eager to attract the mass affluent may be cultivating the wrong image, creating an empathy gap between themselves and their prospective clients.

Nick Richtsmeier, executive vice president of Trilogy Financial, believes that too many advisors are cultivating images of wealth, luxury and even apathy that turn off many Americans saving for their retirement, says Nick Richtsmeier, executive vice president and chief innovation officer of Trilogy Financial, a financial planning firm with more than $2 billion in client assets headquartered in Huntington Beach, Calif.

“It’s an empathy gap that is the effect of decades of culture in the financial services that creates a barrier between people who give advice and those who need advice,” he says. “For years, the benchmark for good advice was affluence – a good advisor appeared to be wealthy. In the past, most people did not begrudge an advisor doing well, but we’ve entered an age driven by digital and social media and the subcultures of Generation x and the millennials.”

Richtsmeier describes the stereotypical image of a financial professional as one wrapped in luxury cars, exclusive neighborhoods, expensive clothes and jewelry. Affluence is exaggerated to create a façade of extreme self-confidence, while value propositions reduced to pithy investment aphorisms and promises of wealth or income for life.

This stereotype of financial advisors leaves the industry vulnerable to disruption, says Richtsmeier, who argues that advisors must stop cultivating the mirage of affluence.

“Clients today are more interested in facilitating high-quality decision-making,” says Richtsmeier. “They want to know that their advisor understands them. There’s a shift; people put a much higher value on authenticity and transparency than they do on appearances.”

For one thing, the façade of luxury sends the wrong message to clients who are often being told to save more and spend less. As advisors use content marketing on thriftiness and budgeting to attract new clientele on the internet, the trappings of wealth “start to smell of hypocrisy unnecessarily,” says Richtsmeier.

While the industry pivots to address low levels of representation of women and minorities among the ranks of financial advisors, such efforts do not address a growing income and lifestyle gap: The average financial advisor makes approximately $140,000 a year, says Richtsmeier, but the average American household reports an income of less than $100,000 a year.

An image of wealth and success was once important to advisors, says Richtsmeier. The long-standing belief was that investors would not want to work with an advisor who did not appear to be successful in maintaining his or her own financial affairs. Such beliefs led advisors to buy designer suits, luxury cars and boats and embrace leisure activities like golf and tennis.

Today’s investors, however, might be more likely to take the expensive car and golf club membership as a sign of high-pressure sales tactics and astronomical investment and planning fees, according to Richtsmeier.

Advisors too often fail to state their true value proposition, says Richtsmeier, assuming that the mass affluent need investment help. Affluent Americans no longer require face-to-face relationships to make investing decisions. Value confusion creates a disconnect between the relationships demanded by affluent consumers and the services prioritized by financial advisors.

“Twenty years ago people were worried about whether their advisor understands capital markets, but now anyone can get market information at their fingertips,” he says. “It’s just not that important anymore.”

In truth, most Americans who reach $1 million in investable assets have already been investing effectively on their own. Capgemini’s recent World Wealth Report 2017 survey found that 56 percent of respondents with more than $1 million in net worth would consider using a roboadvisor form Google, Amazon, Apple of Facebook to manage their wealth in lieu of a human.

Many advisors prospect for clients using dreams and aspirations that are, realistically speaking, beyond the clients’ grasp. Today’s consumers may be skeptical of an advisor purporting to offer the possibility of a second home, a beach retirement and an Ivy League education for their children, when what they really need is help managing their budget, saving for retirement and addressing rising costs like health care and child care.

“At the most macro level, the industry has to make a decision: Does it intend to be a very small group of professionals serving a small, elite clientele, or will it continue as a broad-based industry that serves the broader public?” Asked Richtsmeier. “There’s been a flight among some advisors and companies towards the high-net-worth segment. I believe that we should continue to stay in the broader arena, but we’re going to have to change to more directly address the needs of the greater public.”

“Selling the dream” too often distracts clients with a possibility rather than addressing their financial realities. The mass affluent are more likely to need help with the complexities of their current day-to-day lives rather than an image of a far-off future.

To address these challenges, Richtsmeier proposes that advisors focus more on client onboarding, modernize their services and pricing, introduce a normalized standard of care for clients and invest in their own plans.

Client onboarding should be more about client disclosure than ascertaining risk capacity and checking compliance boxes, says Richtsmeier. Advisors should focus more on their clients’ experiences, concerns, successes and failures, he adds.

Advisors should consider abandoning the asset-based fee and moving towards a subscription- or retainer-based model or a fee-for-service menu, says Richtsmeier. The emphasis must move away from investing and onto providing ongoing care, advice and empathy.

Clients should receive a regular, basic standard of care, says Richtsmeier. Standards of care go beyond best practices to focus on outcomes. Today’s clients expect personallization, individualized advice and timely attention from the digital platforms they encounter – traditional advisors can’t afford to fall behind.

Finally, advisors must be willing to eat their own cooking, says Richtsmeier.  That goes beyond investing in the portfolios they’re recommending to their clients – it means that advisors should also be consumers of financial advice, plan their own financial lives meticulously and practice the financial wisdom that they teach to their clients.

“Advisors should have advisors just like a doctor should have a doctor or a dentist should have a dentist,” said Richtsmeier.