“Flowers carry on dialogues through the graceful bending of their stems and the harmoniously tinted nuances of their blossoms. Every flower has a cordial word which nature directs towards him.”
–Auguste Rodin
This past spring I was reminded once again of the fresh promise of the season, and specifically of the wonder of the perennial bloom. Each year I walk out to the surprise of the first bloom of the golden daffodil. I’m amazed at how great a reward I get for so little effort. It’s not quite the same with the annuals.
When I think about the way money-centered advisors currently do business, it reminds me of the comparison between the annual and the perennial blooms. I found this description of annuals at the HGTV website:
“An annual plant completes its life cycle in one year. That means it germinates from a seed, sends out roots, shoots and flowers, and ultimately sets seed. The goal of every annual is to set seed and ensure the survival of the species. Once seed matures, the life cycle is complete, and the annual plant dies. Other annuals have their lives cut short before they can set seed because frost arrives.”
This description reminds me of the rhythm of the relationship that is built on a money-centered approach:
• The goal is to ensure survival every year (for both client and advisor).
• The plant dies every year and we start over.
• Lives get cut short because of early frosts.
The money-centered approach looks money-maniacally at accounts and amounts, failing to realize that this focus fosters little more than discontentment and skepticism. The engagement begins with a promise that can’t be kept (beat the index) and then confirms the broken promise every three months with a statement. They who measure progress by the Standard & Poor’s index have a very poor standard.
This shortsighted “relative investment performance” approach (RIP) is a suicidal value proposition, destined for eventual undoing and failure. Why would any financial advisors choose such a proposition? I suspect it’s because they have no other value to bring to the table. The risk inherent in the money-centered relationship borders on the ridiculous. It requires you to do a few things:
1. Access knowledge of accounts and amounts.
2. Project better results in the future than in the past.
3. Hope like the dickens that forces beyond your control ratify your projections.
4. Explain your way around the inevitable failures and disappointments.
Aside from being unsustainable, this approach really doesn’t sound like much fun—and I’ve had hundreds of advisors tell me just that. They feel trapped. The process feels redundant, like watching oneself in the movie Groundhog Day and experiencing the same scenario over and over, not knowing how to stop it.
Alternatively, life-centered advisors look clients in the eye and explain their professional priorities:
1. Knowing their clients’ story: where they’ve been, where they are and where they’re going;
2. Understanding their clients’ perspectives on important money issues;
3. Assisting (and sometimes challenging) their clients in making wise financial choices; and
4. Setting realistic financial goals for their clients that best suit their situation.
Money-centered advisors work themselves into a regrettable role as a financial hireling rolling in a wheelbarrow each year with the client’s take for the season, and then waiting on the client’s judgment of their most recent performance.
That’s not the case with life-centered planners, who follow more successful principles of client engagement:
1. “I’m not working for you, I’m working with you.” This means: “I’m going to need your full attention and cooperation to make sure you get where you want to be.”
2. “Our work is to assist you in making wise financial decisions, not in beating market averages. These decisions aren’t limited to investments, but include debt, spending, risk management, income and giving as well.”
3. “We’re focused on personal progress, not comparative results. Our business is to help you move forward from where you are to where you want to be.”
4. “Life-centered planners measure success by ‘return on life’—in other words, by getting you the best life possible with the money you have—not a return on investment. We can’t control every factor that determines ROI, but we can exercise much greater influence over what determines ‘ROL.’”
5. “Our review process puts your narrative ahead of your numbers. We need to stay current with what is happening and what is changing in your life, and to make sure your financial plan reflects that story.”
One of the greatest joys of my career is that I get firsthand feedback from advisors who have made the career-defining migration and transformation from money-centric practices to life-centered planning practices. In a note I received last month, one advisor spoke to the satisfaction of doing things the best way possible—where everyone involved immediately senses both the value and the joy of a proper focus.
“Clients are having fun,” the advisor wrote. “They are coming in and having engaging conversations now. No more arms folded and guarded answers. I have already been able to distinguish myself from the other advisors they are interviewing because they recognize the ROI conversation from ‘the other guys.’ They enjoy seeing the ROL results and the action steps.”
When clients are having fun, the advisor is having even more fun. How much fun is your business? How much fun can it possibly be if it’s centered on factors beyond your locus of control and subject to the annual review? Life-centered planning’s greatest promise to you as an advisor is that it unshackles you from unrealistic expectations and forces you cannot control. Life-centered planning places the emphasis on the well-being of the client, never allowing that focus to shift elsewhere. Clients soon realize that in times of up, down or level markets, their life is still what matters—and wise financial decision-making can keep them on course.
The relationship that is formed through life-centered planning is the real prize—the gift that keeps giving. When clients observe that your motivation is their well-being, there are no more “crossed arm” conversations or guarded answers because they know the questions are asked in their best interest.
The life-centered advisor gets to experience the perennial bloom. Each spring the flower appears—not because of the last year’s bloom—but because of the nature of the relationship.
Mitch Anthony is the author of the industry best seller StorySelling for Financial Advisors and the groundbreaking The New Retirementality (now in its fourth edition). A highly sought-after speaker, Mitch is widely regarded as a thought leader and pioneer in Financial Life Planning.