Recently I wrote an article, “Is Your Friend in Need of Professional Help?”1 The purpose was to make the case because certain functions we think can be done personally are better delegated to a paid professional. Many myths persist concerning “brokers”. How can you let people know how you bring value to the relationship?
1. How do you do business? You have a process built around financial planning. Placing actual trades is only a small part of that process. You help people in unexpected way, like adding value on the liability side of the balance sheet.
Myth: People who work at financial services firms were known as stockbrokers for years. Some people saw them as order takers. You can trade on your own now, therefore you do not need an order taker. You do need a person who can help you establish a roadmap for making progress towards your goals, investing along the way, budgeting and minimizing borrowing costs.
2. You are a licensed professional. You have been trained by the firm. You cannot simply get hired and start making recommendations, you need multiple licenses. These need to be renewed. Even if you are new to the firm, you are often part of a team and have the resources of the firm to access as you help clients.
Myth: You are not a stock picker; you are a relationship manager. They might assume stock picking is a learned skill and you need to “practice” on people before you get it right. As a relationship manager, you might not recommend a single stock yourself because you are working with managed accounts, mutual funds and ETFs.
3. You have a smaller clientele. Online trading, customer service desks and automated service providers have taken away the personal aspects of being a valued customer to a business. You have had the experience of hearing “Your call is important to us. Your estimated wait time is 45 minutes.” You might have 250 client relationships. If the production year has about 250 days, this means you might be able to spend an entire day, measured in hours, giving personalized service to each client. You are committed to helping them make progress towards their goals.
Myth:People may assume you have 10,000 clients. You have no idea who they are, with the exception of the top few. Clients come and go. You do not have a personal relationship with them.
4. Size relationships. Let people know the total amount of assets under management, the average client account size and the high and low parts of the range. This is welcoming, because people can see where they fit, but also motivated to add more money. Why? If they are smaller, no one wants to be considered below average.
Myth: The expression “HNW individual” sounds like “More money than you have got.” This deters friends from approaching you to do business. You want to be inclusive, not exclusive.
5. You are priced fairly. If you live a comfortable lifestyle, friends might assume it is because of the high fees you charge clients. They need to know what you charge, how it breaks down, pricing on fee-based accounts is “pay as you go” and how it compares to other fees in their lives.
Myth: People work with advisors because they have no fee sensitivity or have money to burn. They do not realize HNW individuals are some of the most fee conscious people on Earth.
6. The client needs come first. You provide personalized service and are responsive to their concerns. You strive to “make things easy for them.” You learn how involved they want to be in day-to-day decision making.
Myth: There is a persistent myth financial advisors “tell” clients what to do. You have heard about the “It’s my way or the highway” mentality. Clients are “pushed.”
Many professions have their own myths. Lawyers are ambulance chasers. Accountants are bean counters. Bankers hours mean you leave work at 3:00 PM. Doctors spend Wednesday afternoon on the golf course. Financial advisors need to dispel the myths about their own profession.
Related: How To Discuss Portfolio Performance With Clients
1 https://www.advisorpedia.com/growth/is-your-friend-in-need-of-professional-help/