In their desire to give prudent advice, sometimes advisors fail to deliver the positive messages that clients need to stay motivated and on track. Worse yet, some advisors’ approaches leave clients feeling that their next visit will be a chore.
I was reminded of that in a recent conversation with a professional couple, who told me this about their advisor:
Lots of people complain about their financial advisors, but Nancy’s a joy to work with. We always walk away from meetings with renewed enthusiasm about prospects for the future. Our previous advisor was a nice guy, but his meetings were a bit like going to the dentist – they were often a bit painful. We went because we knew we should but they weren’t really something we looked forward to.
We met Nancy at a dinner party at a friend’s house. Our friend had been telling us about her for a while. We arranged to meet with her the following week and after talking to Nancy, we saw why our friend was so enthusiastic about her.
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Helping clients stayed energized
The next day I called Nancy and arranged to have coffee the following week. Our conversation revealed some important messages for advisors. Nancy gave me permission to share it below.
I believe that I’m in the business of helping clients stay energized and focused on their financial goals and to make financial decisions that will lead happy lives both today and in future. The last 10 years have been tough for a lot of people, and it’s easy to become discouraged. It’s not enough for advisors to give great advice and put together a great plan. You have to help clients stick to that plan. That’s my major focus and that of everyone on my team – to help clients implement the advice they agree to.”
One problem is that there’s so much attention on saving for retirement that people can deprive themselves of the things that make life enjoyable today. My niche is professionals in their 30s, 40s and 50s, many of whom are just ramping up their saving in a serious way. I don’t work with a lot of super-wealthy people. My clients have solid incomes, but most still have to be careful about their spending. That’s why I encourage them to maintain a balance between the things that will let them enjoy retirement and the small things that keep them going day to day.
When I meet with someone for the first time, I talk about their best decades – the years starting in their late fifties or early and mid sixties, when their kids are gone, they are still healthy and they have the time and money to enjoy the things they’ve always dreamed of. We spend a lot of time talking about their goals for that period. I dig deep into the “need to haves” — the basic things that they expect in semi-retirement and retirement — as well as the ”nice to haves,“ the above-and-beyond things that would be nice to do if their health and finances permit. I call the above-and-beyond things the “dream goals.” These could be retiring early, pursuing hobbies, travelling, making a contribution to their church or a charity they’re passionate about or helping their kids or grandkids financially.
That’s the future. Then we talk about the next five years, and I go through the same process of identifying the “need to haves” and “nice to haves.” From that, I create a simple chart that’s the basis of our conversation at every meeting.
Nancy took a napkin and sketched out this two-by-two grid:
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Need to haves – base goals |
Nice to haves – dream goals |
Today |
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In the future |
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When we meet, we use this chart to update where clients are in their lives, what’s happened in the last year and where they stand against their goals.
And then whenever it’s possible, I try to move something from the dream goal column into the base goal category. Those don’t have to be big things – it can be something as small as trying out a new restaurant once a month. But the idea is to have clients feel that they’re making tangible progress in leading fulfilling, enjoyable lives, both today and in the future.
Providing positive reinforcement
I asked Nancy what else she does to have clients look forward to her meetings. Here are some of the strategies she puts in place:
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Conservative assumptions: In the financial plans and budgets that Nancy develops with clients, she deliberately uses conservative assumptions for saving, spending and returns. “You obviously can’t use numbers that create such a negative scenario that clients just throw up their hands,” she said, “but I tell clients at the start that we’re going to err on the side of caution, so that we’ve got a bit of a buffer in case something unexpected comes up.”
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Short-term boosts: As part of her planning, Nancy works with clients to develop budgets and incorporate regular discretionary purchases. “I call these short-term boosts,” she said. “Whether it be once a month or once every two or three months, we build in things like a morning at a spa with friends, dinner out at a special restaurant, a weekend away, a present for a friend or family member or buying a piece of clothing that will make clients feel good when they wear it. The idea here is that my clients can always have something coming up to look forward to.”
Fling expenditures: Nancy is also a big believer in having clients budget for an annual “fling expenditure” in the period after her annual review. “If everything is on track, clients walk away from our meetings with permission to spend money on something that is in the nice-to-do category. One of my clients rented a high-performance sports car for three days and drove down the coast of California and had a blast. They still talk about this three years later. It can be buying something for the house that they’d really like to have but wouldn’t spend the money on in the normal course. It can be making a gift to a cause that is important to them. The idea here is to have clients look forward to our meetings because most of the time they’re going to get good news.
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Positive energy: I told Nancy that I was impressed by her approach and mentioned the comment from her clients about her enthusiasm and energy and that of her team. “There are days when markets can markets and newspaper headlines make it tough to be up,” she said, “but if my team and I aren’t positive, there’s no way I can expect clients to be. I start every morning by meditating for 20 minutes and then going for a run. Those are critical in maintaining my energy level. I try to get outside for fresh air and a quick walk outside my office a couple of times during the day. And when I go out to greet clients, I make a point of picking up my pace. I always greet clients with a big smile and tell them how happy I am to see them. That makes me feel better, and I think it makes them feel better also.
When it comes to my staff, I absolutely hire for attitude. We have a lot of fun on my team, and clients sense that. I think that’s critical for clients to feel. One of the things that helps us all stay positive is that we don’t have any clients who are energy-suckers. We make it very clear to clients that we can only work with people that are looking for us to be partners in helping them reach their goals and who are serious about sticking to their budgets and their plans. That doesn’t mean we won’t revise plans for good reasons, but I’ve had to part company with clients who simply are incapable of controlling their spending or drive us crazy when markets hiccup. What’s interesting is that by saying that upfront at the very first meeting with potential clients, not only does it screen out people who might not be a fit, but I think it makes me more attractive to people who buy into the approach.”
Sending clients away with a smile: Nancy mentioned one final thing she does to make clients look forward to her meetings. “I always wrap up my annual reviews by giving clients a small token of appreciation for the chance to work together,” she said. “It can be a book, a CD or an article related to one of their passions. For example, I have some clients that love to cook and one of my assistants digs up interesting recipes or reviews of restaurants they may not have seen. Or if they have grandkids, we may give them an article about communicating with grandchildren or a small gift to pass on to their grandkids. It’s my two assistants’ job to come up with something fun and inspiring that is specific to the things that get them most excited in life.”
Nancy wrapped up our conversation with this observation: “My goal is to have clients walk away from our meetings with at least one piece of good news that will put a spring in their step when they walk out my door. Sometimes this will be a big piece of good news – for example, in 2009, the good news was that portfolios had done much better than many clients feared and their plans were still on track. In other cases, the good news is that they can accelerate plans to retire or pull the trigger on a big purchase they’ve been saving towards. Or perhaps the good news is that they can afford to help their kids buy a house. Almost anything will do. Even if the good news is that they can make that annual fling purchase we’ve got budgeted, that’s still good news.
“Going back to what we talked about at the beginning, I always tell my team that our mission is to help clients put the activity in place that will allow them to lead happy lives, both today and in future – and I tell my clients the same thing. The last thing that I want is be seen as that well-intentioned but slightly nagging teacher that we all remember from our days at school. Instead, I want clients to see me as that gung-ho enthusiastic teacher whose classes we looked forward to, so that clients will really enjoy spending time with me and look forward to our meetings.”
These days you can’t pick up a publication for advisors without reading about the need to “articulate your value to clients.” Nancy’s definition of her value as “helping clients take the actions that will allow for happy lives today and in future” shapes every aspect of her practice and has led to high levels of loyalty and word of mouth. As you think about her approach, consider what lessons you can take from Nancy’s success in moving your own business forward.
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.
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