Not long ago, I had the good fortune to see a presentation given by an insurance industry legend. He highlighted four traits that he had seen all top advisors do exceptionally well: They find, educate, motivate and inspire their clients.
While there are many strategies advisors can use to find clients, the best channel remains referrals. And, to achieve an ongoing stream of referrals, you’ll need to be successful at educating, motivating and inspiring your existing client base.
During National Financial Literacy Month, I can’t emphasize enough the importance that a plan for educating your clients can play in establishing a strong emotional connection with them. Recent research suggests that advisors aren’t educating, motivating and inspiring clients as much as we might think.
The Guardian Life Insurance Company of America (Guardian) conducted a study to better understand the emotional and financial confidence of nearly 5,000 working Americans, with household incomes of $50K or greater. Participants in The Guardian Study of Financial and Emotional Confidence named trustworthiness, integrity, knowledge, listening and experience as the top five traits they believe are most important in an advisor. However, almost 50 percent of advisors were rated as only “pretty good” when it comes to delivering on those traits for their clients.
There’s a big gap here. You’re not going to educate, motivate and inspire if you’re being perceived as only “pretty good” in those desired traits. If you want to mimic what top advisors do exceptionally well, you’ll need a thoughtful strategy—and an education policy is a great place to start. An education policy is a strategic plan that outlines specific learning objectives with on-going education tactics to help close financial literacy gaps with your clients—thereby increasing confidence and empowering them to make good decisions with you.
According to the Guardian study, nearly 80 percent of working American families have some degree of stress about their financial future, regardless of age, gender, income or other demographics. But what was truly fascinating was what we learned from the 21 percent who were not stressed. Interestingly, it’s not just about income. There’s a lot more going on than a bank statement may reveal.
Education Is Key
The research revealed a population of Americans—“confident planners”—who exhibited a pattern of behaviors and attitudes that correlated with greater emotional and financial confidence. As a group, confident planners tend to have a long-term, written financial plan with clearly stated objectives. They have healthy attitudes toward money, live within their means, own products that offer both growth and protection, and work with an advisor that they rate highly. Additionally, confident planners not only are formally well-educated, but they displayed much higher levels of financial lteracy and financial product understanding (or they believe they do).
By helping Americans understand the behaviors of confident planners, and create a roadmap to help them mimic those behaviors, perhaps advisors can position themselves to more effectively motivate, educate and inspire.