Editor’s Note: This article is based on Steve Sanduski’s podcast interview with Seth Streeter of Mission Wealth. To access more than 100 interviews with industry leaders, subscribe for free to Steve’s podcast, Between Now and Success by
The money management side of what financial advisors do is quickly becoming a technology and cost-driven activity that will soon leave little margin for advisors. If you continue to focus your business around this function, your income will whittle away at an ever-increasing speed.
What will replace money management as the profit-driver for financial advisors?
The short answer is Life-Centered Planning.
Life-Centered Planning involves putting your client’s life at the center of the conversation, not their money.
Your greatest value lies in helping your clients make better decisions at the intersection of money and life.
Top advisor Seth Streeter is on the leading edge of merging money with the life conversation. As part of their approach to managing $1.6 billion in assets, Seth’s team at Mission Wealth helps clients think about wealth beyond their money, so they can enjoy more balanced, impactful and fulfilled lives.
An Epiphany
“For the first couple of decades in my career, I was really focused around the financial dimensions,” said Seth. “It was helping people retire. It was helping people sell their companies. Then I realized that I was helping people accumulate and secure their wealth, but it didn’t necessarily mean that they were that much more fulfilled, or that they had greater meaning or purpose in their lives.”
I know many advisors have experienced the same thing as Seth. You’re helping rich people get richer but it’s not necessarily making anybody happier. So, what do you do?
“That’s where I realized that we have such a huge opportunity in professional advisory services. People are really trusting us, and they’re opening up and they’re sharing their warts and blemishes and family dynamics and hopes and fears. If we just stay at a surface level and only talk about their mortgage and their 401(k) and their Roth IRA conversion, we’re missing the opportunity to have a deeper, transformational impact on their lives,” said Seth.
Seth drew inspiration from the “conscientious capitalism” movement popularized by companies like Whole Foods, which include positive community impact as an overall business goal. That’s an appropriate model to consider when thinking about the future of financial advice, and the next generation of investors.
Values Are The Foundation
As both consumers and employees, millennials are attracted to companies that broadcast a mission beyond profit. They’re less interested in their money as numbers on a page than they are in knowing how their money can provide a better quality of life for themselves, and the world at large.
“Values are the foundation,” said Seth. “First, from the company cultural standpoint, we have a service-oriented and caring culture. We feel we can be the best in the world at our level of care for each other, for our clients, for ourselves, for the communities we serve. But, when we work with clients, we also help them identify their core values and then we look at how their lives, how they invest, their careers, and so forth, align with those values.
Seth is making a key point here. If all you’re doing is helping your clients make and save more money—without really knowing the values that underpin their money and life decisions—then you are truly doing a disservice to your clients.
To help make sure his clients’ plan is aligned with their values, Seth said, “We offer socially responsible investing for our clients. A lot of times clients will be really into volunteering and buying organic foods. Then we find out they own pesticide companies in their portfolio, and they own companies that are doing animal testing and things that their values wouldn’t normally be in sync with.”
Use Assessments
The secret to this kind of Life-Centered Planning is understanding your clients’ attitudes towards money, and reasons behind those attitudes. Some advisors use face-to-face conversation to get to these root causes. Others, like Seth, utilize assessments that help both advisors and clients rate and rank important money matters, and assess how satisfied their clients are about how they’re using their wealth.
“We will help clients go through the process of assessing their degree of satisfaction across 10 dimensions of wealth,” said Seth. “They will really reflect and ask, ‘Am I happy with the level of impact I’m having in the community or in the world at large? Am I happy with the depth and caliber of my family relationships? Am I happy with my physical health, how my body looks, feels and functions? Am I intellectually challenged? Do I feel like I have a growth mindset or am I bored?’”
Once Seth and his team have helped clients identify these key values, they’re able to create individualized strategies that actionize those values across every aspect of the plan: everything from products and services clients buy and companies they invest in, to charitable giving and legacy planning. Mission Wealth suggests ways they can support clients’ values across key life and money categories, and helps clients allocate their resources to things that improve their feelings of purpose and happiness.
“It’s helping them reconnect the money piece in their life to the value piece that they have in their life,” Seth said. “That’s really, really fun work.” It’s also work that’s good for your business.
Become The ‘First Call’
Advisors who can help their clients see how planning can benefit all areas of their lives will keep both parties engaged in the process. Instead of providing a yearly review to rebalance a portfolio, advisors can become a trusted resource during major decisions—a “first call” when clients need help navigating those moments when life and money intersect. A robo advisor can’t be that kind of trusted resource, because it can’t provide that human touch.
Unfortunately, neither can a lot of struggling financial advisors.
Everyone in our industry knows that automation, apps and diminishing AUM fees are changing the advisory business forever. But far too many advisors are trying to adapt by doubling down on more in-house tech, shinier apps—all things that make your practice blend in with the competition rather than stand out.
More often than not, advisors are turning to these kinds of “solutions” because they’re uncomfortable with deep discussions at the intersection of money and life that only people can provide. Advisors who are afraid to engage their emotions and be vulnerable are never going to be able to help clients discover what they really want and need.
“In the financial world, we’re largely left-brain thinkers,” noted Seth. “We’re good at math and analytics and research. When someone is coming to us with a lot of emotional needs, sometimes it’s uncomfortable. We’re not the type to necessarily be overly vulnerable in our personal lives, so why would we do that with clients? As a result, we have a lot of two-dimensional conversations.”
Embrace Emotional Moments
Sympathy, empathy, enthusiasm, encouragement, support—this is where advisors can find that missing third dimension, and start having new, valuable conversations about financial planning.
Seth has put a lot of effort into hiring people who really care about the human touch Mission Wealth provides clients. Together, Seth and his team have learned how to embrace emotional moments with clients, rather than try to power past them.
“I’ve seen plenty of meetings where the advisor will say, ‘Hey, Bob, take your time. Here’s a tissue. Let me know when you’re ready to get back into it,’” Seth said. “The client takes a few moments and then you say, ‘Okay. Great. Now, let’s get back to your mortgage.’” In reality, those are the moments when advisors can really add value that no technology can make obsolete.
Seth has grown a multibillion-dollar business by helping clients find that “need beneath the need,” but an advisory firm of any size can thrive using the same philosophy that’s driven Mission Wealth’s incredible success. Your clients need more than just numbers growing bigger, and arrows trending up. They need you to help them more closely align the way they use their money to live a better life.
Three Takeaways
1. As money management becomes a technology and cost-driven activity, the leading advisors are emphasizing the “life” conversation, and how their clients can use their money to live a better life.
2. You need to understand your client’s values and then use those values as the foundation of your Life-Centered Plan.
3. Being vulnerable and empathetic are two traits the successful advisors of the future must exhibit.
Steve Sanduski, CFP, is the co-creator of ROL Advisor, a discovery process technology system, a New York Times bestselling author, podcast host, international speaker and blogger at BelayAdvisor.com.