Welcome to Q4 2018. Here’s where we are:
Do the right thing no matter how you choose to operate your business. You can tell your clients you’re a fiduciary and that you have their interests above all else, but you’re going to talk that talk you need to walk that walk. There’s not a single rule, regulation or compensation model in the world that can replace morality. It’s not what you say, it’s what you do. If you make a habit of wronging others or behaving unethically, you’re not going to last very long.
Don’t fool yourself into justifying the sale of products that objectively have no business being sold. My colleagues at Ritholtz Wealth did a great job covering this over the past few weeks. Blair and Tony pointed out some inconvenient truths relating to insurance and other financial products. It even made some people very sensitive. I wonder why? In today’s environment, I’ve learned that you shouldn’t really “sell” anything except the value you deliver through financial planning.
Do promote financial literacy in everything that you do. Take a page from Ric Edelman. It’s our job to educate our clients and, to an extent, all of those around us who want to be helped. If we don’t take this approach, how can we really help people make informed financial decisions? With the knowledge and experience we’ve acquired, along with our ability to have impact on the lives of others, we should have an obligation to make the world a more financially capable place.
Don’t pretend like investments haven’t become commoditized. There’s a reason why the robos aren’t going anywhere any time soon and why they should be treated as just one more tool in your advisor tool belt. More importantly, you don’t possess an investment strategy that consistently outperforms the market. Luckily, you don’t need one. What you will need is a transparent and easy to understand investment process that delivers expected returns linked directly to one’s financial goals.
Do offer financial planning above all else. By taking a “planning first” approach, you allow yourself the opportunity to showcase your capabilities and personality. You get to demonstrate how you provide value and set reasonable expectations for achieving results. Planning creates the pathway to objectively introduce and educate clients on both products and investment services.
Don’t take commissions if you don’t have to. Even if you’re a fee-based advisor who wants to provide value by placing the occasional trade, do it at-cost in a brokerage account. Don’t even think about touching things like advisor led 529-plans. You’re better off helping set up a direct plan and telling your clients why you did that instead. They are going to love you for it and it shows where your interests lie.
Do focus on marketing and building your brand. My friend Justin Castelli said it best when presenting to his XY Planning Network colleagues last week. Be authentic, be genuine and play the long-game. Figure out what you want to be known for and what you are passionate about? If possible, marry these two together and build a business your business around that. In case you haven’t heard, being a “fiduciary advisor” isn’t a differentiator. Go find something that makes truly makes you special.
Don’t be everything to everyone. You can’t be the every-man’s financial advisor and you certainly can’t be an expert at everything. Again, figure out who you are as an advisor. This will ultimately dictate who you will work with and how you will grow your business. Then, become an expert in your area of focus while relying on the help of others to assist you in your less proficient areas. Double down on your strengths and outsource your weaknesses.
Do take care of your business and the people in it. Few things are as critical as making sure you treat the people that work for you with care and respect. Create a work environment that fosters personal and professional growth. By understanding what motivates your employees, you can better align their interests with the interests of the firm. You can also better determine what benefits are required to achieve long-term success. You know what they say, “If you take care of your people, the rest will take care of itself.”
Don’t ever forget that your real bosses are your clients. With there being no shortage of financial professionals out there, providing exceptional service and support is table stakes. You can’t consistently outperform the market when it comes to investments, but you can consistently deliver an outstanding experience for those who’ve chosen you as their trusted advisor. Remember, no matter how good your technical abilities, you live and die by the client relationship. Show the love.