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
advisor.
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.