If I Knew Then What I Know Now: - Advice for Financial Advisors

All of us do this at some point in our lives. We sit back and reflect on everything that life has taught us over the years. It is said that mistakes are the schoolbooks on which we learn. If that is the case, I have read A LOT of schoolbooks!



Since I’ve made mistakes over the years, I thought that I would share some of the big lessons I have learned in hopes of helping the next generation of financial advisors.



Lesson #1 – Not Everyone is Your Client 



In my early days, I thought I could convince everyone to be my client. I had all kinds of tactics to bring people aboard. I would bend over backwards to accommodate even the most difficult request. I would change everything including my philosophy and belief system if a client wanted it. The result - my business grew but at what cost? I was trying to make everyone happy and the result was that no one was happy, including me. Then a light bulb went off and I realized that not everyone is a client. A true client is the person for whom you can create meaningful value. It is through this creation of value that I get paid. The more value I can create, the more money I will make. Seemed simple.



At that point, I sold off any client who I didn’t think I was providing value to or didn’t appreciate the value I was bringing to the relationship. This represented roughly a third of my book at the time. It was a major turning point in my life. I started to only deal with happy people and therefore, I was enthusiastic about coming into work, my team was happier, and my clients got great service. I soon replaced the assets that I sold and went on to triple my production over three years.

Takeaway: The saying, “quality over quantity” couldn’t be truer. It might seem hard at first to scale back clients, especially since it took time to build your book, but think about the type of business you want to have 10 or 20 years from now, and where you can deliver the most value.

Lesson #2 – The Dog that Chases Two Rabbits Goes Hungry 



This adage is so true. Focus on where you create the most value and outsource everything else. When I started out as an advisor, I felt that I created value through giving my clients superior returns on their investments. I spent time researching the various options, back testing scenarios, listening to “research experts” (better known as wholesalers) and reviewing each client’s portfolio on a monthly basis. These activities took enormous amounts of time and energy and at the end of the day, I wasn’t really adding any value. In fact, if truth be told, I was taking value away with my managing. So, I decided that my rabbit wasn’t going to be client returns but the client experience. Luckily, the bar is set so low in our industry that it was easy to take on this effort.



I focused all my energy on the experience of financial advice, financial plans, reviews, calls, client events, and ‘wow’ experiences. All my competitors were talking about return on investments (boring) and I was talking about client’s lives. The result was that my referrals shot through the roof. I found out that ‘wow’ experiences really do compel people to tell other people.  

Takeaway: Instead of return on investment, help clients understand what their return on life could be. Creating a financial plan is important, but its pointless if you don’t understand what the client wants to achieve in their life. Staying laser focused on creating a remarkable client experience will ensure you have life-long clients.

Lesson #3 – Technology is Not Your Enemy



I vividly remember in 1997 talking to the guy who did our network about getting a website. He was trying to convince me that we needed to get one and I answered, “my clients care less about the internet”. I guess I was wrong. Without being aware of it, my lack of interest in technology dramatically hindered my success. There is something called projection that humans use to cover up their weaknesses. They project their own weakness onto their clients. I did exactly that and paid the price.

Takeaway: Keep an open mind and don’t project your weakness onto your clients. Embrace technology and constantly look for ways to use it as a tool to find efficiencies, create better client experiences, and streamline the way you work.



These are my top three lessons. The sad fact is that I could probably fill a book with mistakes I have made over my career. But making mistakes is not a bad thing if you are willing to learn and improve. Mistakes are one of the best tools for learning and sometimes the greater the pain the better the lesson.



Have you got a lesson to share?



Cheers,

Chris