This week, we‘re viewing that ambiguous liminal space between client and financial advisor (or business owner) from the point of view of the financial advisor. It’s up to you to decide if you’re looking for a “trunk” or a “tail”! (See my July 10th post for part 1, from the point of view of the client).
The following question could be asked of any provider who deals with the intimacy of life and money issues—attorneys, CPA’s, business brokers, pastors, therapists, and the multitude of folks giving guidance in the relationship and wealth/value-creation arena:
How do you determine if you are looking for
a tail or a trunk?
You can begin by doing the following exercise. Take some time to think through or reaffirm your answers, then write them down.
- What are my core values? What not only gets me out of bed in the morning but guides my daily decision making?
- Am I comfortable relating to this client from those values?
- Am I willing to not retain someone due to a conflict in those values/expectations? (For example, one advisor’s values means that he refuses to meet with anyone in the lucrative medical marijuana industry).
- Do I believe that as I translate the intangibles of my client’s values/feelings, s/he will execute to that plan so that both of us are pleased with the results and the relationship?
- Is there a potential conflict of interest—or personality or….—that will interfere with my ability to hold to a fiduciary standard?
The irony is that when financial planners are driven by lack of clarity—often understandably related to the need to survive—they are prone to making ill-advised client choices.
Choosing the wrong client ultimately drains time, energy and money.
Eventually, an advisor will also have to do the hard work of removing that client to retain the ideal ones.
The economic notion of “necessary but not sufficient conditions” applies as much to choosing clients as it does to optimizing economic parameters: finding new clients who meet those “necessary conditions” is merely a good start.
Some typical screening criteria in this category include:
- acquiring a client with a minimum dollar amount of investable assets (often fudged!).
- focusing on an obvious professional/economic class like physicians or “High Net Worth” individuals.
Another example of a “not sufficient condition (criteria)” is a webinar advising the value of connecting one’s practice to a particular high value/underutilized search term to drive traffic to an advisor’s site using that term. Such advice is only appropriate if that search term actually aligns with your overall values and brand strategy.
The alternative? I suggest staying closer to your own mark using criteria like:
- making a cultural connection with a particular demographic (for example, TIAA-CREF’s focus on the government and educational markets).
- gathering psychographic criteria to capture terms like “professional” or what you mean by “nice to work with.”
- descriptors such as “generous,” “collaborative” or “spiritually grounded.”
By nature, financial planning is, in essence,about helping people clarify their lives.
To learn more, see colleague Kevin Condon’s editorial:
As a financial advisor (or business owner), your practice ought to be a reflection of your life values.
The first step to gaining clarity is to be aware of how your background leads to your ideal client.
- What is it about your experience or background that best enables you to serve this kind of client?
- What are some key inflection points in your life? Consider:
◊ industry experiences
◊ deep connection with a particular market
◊ life-changing experiences (marriage, divorce, caring for aging parents, etc.)
- What aspect of the financial planning process makes you come alive?
Once you are clearer about your own values, you’ll be ready to build a practice to truly enjoy for years to come!
Jon Hokama is the Principal and Founder of Jon Hokama and Associates, LLC.
Toolkit:
Here are three self-awareness questions that financial planners—and any business owners—should ask themselves:
- What type of client do I love working with? Why?
- What type of client do I dread working with? Why?
- What is my very next step to get more of the former and reduce the latter in my practice? When will I do this and whom will I inform for support?
Have a great week actualizing your ideal practice!
