This fall, several of the advisory boards I conducted sought feedback on the financial plans they deliver to clients. And we heard something surprising, at least to one of the advisors.
His clients appreciate his comprehensive approach. He is proud of how thorough the planning process is. In fact, he and a partner, another very successful advisor who works with high net worth business owners, market their planning process to other advisors. They have a network of financial professionals who license the system, take a multi-day training course to use it, and gather periodically to deepen their understanding of how to use it.
He recently contemplated a few changes to the layout of the plan. He sought to incorporate more of the reports that come directly out of the underlying software and save some of the time and effort his staff currently invests in translating it into a custom presentation.
In the middle of the plan was a page labeled “Plan Summary”. It provided an overview of much of the material that preceded it. At the end of the document was an action item list, enumerating the follow-up tasks assigned to either the advisor or the client.
Once we had critiqued a number of the new sections of the plan, I asked a question intended to identify which sections we might condense or even omit. “What if,” I asked, “we delivered only the plan summary?” What I anticipated was that the group would identify the most important portions of the document, enabling us to pinpoint the areas we might edit down. The answer shocked the advisor.
“That would be fine,” they said.
After some discussion, they amended that answer. They really like the action list. Put that together with the plan summary and that would be sufficient.
What we have been hearing from many boards is that while they appreciate the comprehensive, in-depth analysis their advisor does on their situation, they find that extensively documenting the analysis is more than they need to know and unnecessarily complicates the resulting advice.
This advisor built a business on thorough, comprehensive plans. His clients had always complimented him on how much he addressed in his process. It surprised him to learn that he did not have to prove the value of his process by walking everyone through a detailed deliverable.
They make a distinction between the depth of planning and the length of the plan.
If you think about it in another context, it makes sense. Imagine going to the doctor for your annual physical. Let’s assume that you like this doctor because she practices functional medicine and provides you advice beyond the average allopathic physician, offering guidance on nutrition, exercise, and other strategies to optimize your health. Would you want to spend a couple hours reviewing in depth all of her analysis, the data from the tests she ran, and the statistics and ratios she relies on to make her recommendations? I wouldn’t. I would appreciate understanding some of the principles I might keep them in mind to improve my well-being, and would be primarily interested in her recommendations. Tell me your observation, your suggestions, and a couple guidelines I might keep in mind to keep myself moving in the right direction.
This is not an original observation, of course. Carl Richards wrote his book The One-Page Financial Plan way back in 2015. He and Michael Kitces discussed how advisors could utilize the concept on their podcast this past July. And, just last month, Jeremy Walter authored a post on Kitces’s Nerd’s Eye View blog about how he has implemented the idea.
Clients need more than your technical expertise. They need you to make it understandable.
Several clients in these advisory board meetings commented that if they needed the supporting documentation, the advisor could pull it up on the screen while they were discussing it. If they wanted to retain that additional information (and they thought it unlikely), it could be printed out at the end of the meeting.
Get your clients together and see what feedback they can give you on the plans you deliver. You might be able to increase the value and save yourself some work in the process.