The Challenger Sale: The Lone Wolf’s Path to Extinction

And I'm in great shape about the way that we put together this podcast idea. Alright audience, where we're going to land is, the title for our podcast is The Challenger Sale, the Lone Wolf's Path to Extinction. And what we're hearkening back to is like a seminal research piece.

A book that had an impact, at least on the way that I thought about putting my value proposition as a financial advisor out into the zeitgeist. And I know a lot of influencers inside of the financial services industry have some of their initial positioning of how they wanted to bring their message to market significantly impacted by this book. Where we were coming at as your podcast hosts, though, we started down the path of, what roles do financial advisors in today's market, what roles do financial advisors really want to take in their families' lives? And for framing everybody, we started off with thinking, sometimes advisors really don't want to get in the weeds or in the touchy-huggy-feely, emotionally intelligent parts of their clients' lives.

And Suzanne, when we were prepping, we were thinking, this is going to be a good podcast framing. And then we ended up coming all the way back to advisor archetypes from The Challenger Sale. So why don't we put this to you, Suzanne. Bring the audience along with where we started. What kind of roles do financial advisors really want to play in their clients' lives? And why don't you go back to that part of our conversation and orient for the audience how we started thinking about that.

[00:02:12] Suzanne Schmitt: Yeah, absolutely. And just for posterity, we've mentioned The Challenger Sale a couple times. For folks that want to check it out. It is by Dixon and Adamson. Readily available[JL1]  along with a lot of really interesting resource and workbook type support systems. Readily available and easily consumed. But I think, Tom, to your question and your point, we really started talking about, especially over the last few years, and I think Covid accelerated this because our lives changed very fundamentally. The role of the advisor over the last, you could argue even decade, has really started to change such that it isn't solely about money management. And particularly with the advent of things like AI and digital tools that have gotten more sophisticated, increasingly the role of the financial advisor has really broadened to take on almost more of a life coach aspect so that a lot of advisors are not just having to get into, but are expected to get into the psychosocial needs of their clients, their families, and really not just have a point of view, but have references around issues that run the gamut from psychological support to addiction, to employment, to a much deeper level of sophistication expected around things like college planning. So, we had, I thought a good time riffing on the role of the advisor shifting more into life coach space. And I'm curious to put the question back to you, because you are someone who for a long time, pre-Covid, even was getting into more of the psychosocial and particularly the housing-related issues your clients were facing.

Tell us if you would, a little bit about your evolution to that and maybe we can bring it back to The Challenger Sale because you definitely embody a lot of those characteristics.

[00:03:58] Tom West: Sure. I appreciate that. I think that, at least for me, my particular path in terms of trying to get more involved in aspects of my client's lives that involve money, but are about other kinds of shifting priorities. That's been kind of like a mindset, like everybody's, "what's your why?"

My "why" impact, certainly from early in my career, where I was exposed to a lot of chronic illness and families in transition very early in my career. I wanted not just to be profitable and to grow and to explore my curiosity, but I really wanted to make a positive impact on the lives of my clients.

And I think that, for the audience, one of the images that might be helping as I'm answering Suzanne's question, is thinking about Maslow's Hierarchy of Needs. And I remember Bill Bachrach[JL2] , that he had the, "what's important about money to you?" framing. This was something back in my insurance days.

And I took some of that framing to heart when I was focusing a little bit on what are the most important priorities that cascade down into financial decisions that are not specifically quantitative? And for me, like I kind of backed into some of my practice's success, with what's probably a little bit more of a willingness early in my career to get involved in the more uncomfortable conversations.

So, I've been blessed. I'd like to say it was all on purpose. It isn't all on purpose. Sometimes the market comes to you as compared to your following the market. But I think where the market is sort of giving us a lot of signals is there's an expectation for advisors right now to be more than just portfolio managers.

When you think of the overlay of the need for financial planning to make sure that the portfolio is aimed at the right target. The idea of tax sensitivity and what are they calling it, gamma return [JL3] or something along those lines. I think that particularly for those of us that are in the industry and we're getting some retainer percentage as the primary way we're compensated. Suzanne, I think that you'll agree, but maybe you can riff on this a little bit.

What's the market telling us about expectations of advisors and the breadth of impact and the breadth of services that we see now in 2025 and projecting forward, like what's the market telling us that they're going to want out of our industry?

[00:06:44] Suzanne Schmitt: Yeah, more is the short answer. So the market is telling us pretty loud and pretty clear, in my opinion, that consumers are expecting advisors to be holistic planners in the sense that they are attuned to and managing for consumers who are still in the workforce, their workplace-based benefits, which most advisors historically have known about obviously, but have not necessarily had real, hands-on perspective. I'm starting there because for most consumers, outside of their house, their retirement plan savings are their largest asset, especially as we go a little bit more down market or mass affluent. So definite expectation around integration. And we've seen some pretty sophisticated attempts in the workplace to inject advisors that are affiliated with those retirement plan sponsors.

That gets me to the second point, and that is the market, and this is driven largely by those bigger providers, is expecting much more consistency. And there has been a move using technology as a primary driver, but even getting into, Tom, things like practice management programs to really make systematized the ways in which advisors are engaging. So said another way, a consumer can and should expect a very consistent experience, whether they're talking to their first advisor at a firm or somebody else on the team.

Third point and trend that we're seeing in market is the move to teams. And in fact, a lot of consumers have helped drive those financial services firms to do that because they expect specialization on the teams. We both touched on mental health. Increasingly consumers are concerned about medical care, not just funding it, but getting access to the best medical care. And so, a little bit anecdotal, but seeing a shift to expectation that an advisor has resources of the medical concierge variety. Some specialization in mental health and addiction. You touched on tax, but the consumer and the market is really coming together around a one-stop shop, if you would, with the advisor.

And then lastly, just better communication in general. The market is really pushing individual advisors to get savvier. Both about generational expectations, but also just the ways in which consumers prefer to engage. And depending on the study you look at, what, north of 70% of consumers will leave an advisor, not because of poor performance, but because of poor communication. So consumers are definitely expecting advisors to step up and fill in significant gaps in their planning, but also just the ways in which they live their lives.

And I'm curious from your perspective, does that resonate in terms of what in your own practice and among your peers?

[00:09:23] Tom West: It does. I think when you're talking a little bit about poor communication as a major reason that clients are leaving, I think it's not just frequency of communication or the accuracy of the communication. It isn't only being able to make relevant and make sense back to the client. I think it's the breadth of topics. And that I think is something that, at least with my practice, I've been spending a good amount of time with.

So what I'm going to do, everybody is I'm going to bring this slowly back to this Challenger Sale framework, but I wanted to remind everybody as a place to start, go back to Maslow's hierarchy of needs. On the bottom, the idea that you have survival as the main Maslow need on the base, going all the way up to self-actualization on the top. And one of the ways that we started thinking about this podcast was, listen, advisors, if you're not talking about a wider range of topics, if you're not looking to make more and deeper emotional connection in disciplined ways across different communications strategies with your clients, you're going to be at risk of the wrong side of the net flows.

And in my mind, this is really helpful to juxtapose on top of this Challenger Sale. The Challenger Sale, it basically gave us everybody, by way of a reminder, five different archetypes of effective business development. think of it like for those of us in the industry that came out of sales, which was certainly my side of things. This is a really interesting way to jump off.

And by way of a reminder, everybody, there were five archetypes. There was The Challenger. Basically the idea is you create a sense of urgency with your prospect or with your client to reframe a set of problems in a way that they might not know the path to a solution, which you then present. That's basically The Challenger framework. But there were also Reactive Problem Solvers. There were Hard Workers. There were Relationship Builders. And then the last one was Lone Wolves.

And I always like to think about Lone Wolves, remember that we're coming back to the title of this is The Challenger Sale and Lone Wolf Path to Extinction[JL4] . How we arrived at that, I have always been, Suzanne, in my career, around lone wolf types. And when you're asking lone wolves who, "I don't need anything from the home office, I might not even need anything from staff. I got my way, I got my vibe. You know, 'what's my why?' has very much to do with independence." Lone wolves are everywhere, I think, in the financial services industry. But when we were thinking a little bit about, clients are demanding more communication on more stuff. How on earth is a solo going to be able to pull this off?

And I'll put that back to you. What are the risks of advisors that maybe haven't been doing the teams thing or maybe don't have a breadth of communication by way of volume or different kinds of paths of communication, like how did you arrive at your conclusion that maybe lone wolf as a framing, might not have a long history in our industry?

[00:12:45] Suzanne Schmitt: Yeah, so the lone wolf, that kind of cult of personality where an individual advisor could generate his or her own secret sauce, not have to share it, and still be successful. You could argue, and I have certainly seen this in the data and in market as I talk with advisors, a lot of tools that have been introduced digitally, specifically with the advent of AI and the acceleration of a lot of portfolio management tools, they're now accessible to consumers and other advisors.

So in essence, you can decode the lone wolf secret sauce with much greater ease than ever before. Whether you are a competitor, meaning an advisor or an individual client. So I think that's one of the first challenges to the lone wolf. Second challenge is the lone wolf as an individual, as an archetype, generally does not invest heavily in the soft skills that clients expect. So the lone wolf is much more apt to rely on his or her business acumen, their systems. They tend to also, by the way, be harder to manage within teams. So the lone wolf, yeah.

[00:13:50] Tom West: That would be the lone wolf part.

[00:13:53] Suzanne Schmitt: Oh, we all probably all have a little lone wolf in us, but, they are more likely to get pushed out of those larger institutions, increasingly moving to a more collegial team space structure. And lastly, …

[00:14:06] Tom West: …or they move themselves out.

[00:14:07] Suzanne Schmitt: Correct. They exactly, they vote themselves off that island. And then finally on the lone wolf front, with regard to making investments in understanding clients' communication preferences with regard to giving credit and merit to the topics that clients want advisors to be able to speak to, candidly, the lone wolf self-select into, "I just generally don't care too much about that stuff." They want to stay in their lane, and focus on what they're good at. So it, in my opinion, based on the data and the advisors that I'm talking to, those three variables make it tough and increasingly tougher for that lone wolf to prosper in this particular marketplace.

[00:14:46] Tom West: Yeah. Yeah. I think that one of the learned experiences that I've had in my career. I've always been, everybody, one of those, "together we go far," get a big team rolling. That's always been one of my personal programs. Like, I wanted to do this with a group of people and I feel better about my own success when it's shared with a group that we're all rowing in the same direction.

I do think that the idea of the adaptability of lone wolves, I think that's under a whole lot of pressure. Let's go back everybody to that framing about Maslow's hierarchy. I want you to think of it this way. If you are not talking to your client about the most important things to them, which by way of a reminder, those most important things, they change as different seasons of somebody's life go through things, the idea of maintaining lifestyle or supporting children or managing healthcare. Like, the priorities change. If you're not talking to your clients with a communication strategy that touches on all of this different stuff, it's worth reminding you, somebody else will be. Somebody else is talking to them about that stuff right now. And some of them are competing advisors, advisors like me. I really like talk. I really, when I'm being competitive, and I'm taking business from other advisors, it's usually because I've got a bigger group of people that make a prospective client feel like they're getting more love.

That's one of the areas. But let's talk a little bit too about AI and learned communication since technology incented. Boy, if AI's talking to your clients about that stuff and you're not, that's part of the reason that we're thinking maybe that path to extinction might be coming sooner than you think.

Suzanne, talk a little bit about technology and communication with clients, maybe through the framing of what are the big boys doing?

[00:16:53] Suzanne Schmitt: Before I do that, just want to go back to your point around Maslow. I think the other threat, Tom, to the lone wolf, if you lean into the Maslow hierarchy is, lone wolves are really good at either end of that spectrum, meaning lone wolves tend to be great technicians. So if you kind of align that to Maslow, they're going to make sure your basic needs are met they're going to specialize at the top of that Maslow's pyramid. What they don't do so well at is the connective tissue between all of the family interconnectivity. All of the lifestyle stuff. So wanted to call that out because to your point, life is not linear.

But with regard to AI and specifically with regard to the lone wolf, the biggest threat from an AI perspective is the now increasingly sophisticated portfolio modeling and risk management tools that are available for the non-lone wolf to basically hack the lone wolf. So that is equally available to advisors and to consumers. And there is some degree, emerging in the research of a sentiment that lone wolfs are just not early adopters of AI. They think they've got it. They don't necessarily see the value of adopting those risk management tools, nor do they see, the risk mitigation strategies.

But in essence, for the lone wolf, the, the other challenge for him or her is, there is no home office tech team advising them on what to adopt, what's out there, what's in market? And, with regard to the big offices, what I am increasingly seeing are very significant investments being made in not just AI, but AI integration to CRM, to product portfolios and to planning software like eMoney. And again, the challenge there for the lone wolf is twofold. One, with respect, the Vanguards, the Fidelitys, the Schwabs are the lone wolf killers because they have a zero-tolerance policy for people that don't in essence tow the planning line. They want consistency. Obviously, performance, but consistency is critical and that makes it challenging for the lone wolf for two reasons.

One, there's no place for him or her there. And two, those firms in my opinion, are going to have a huge competitive edge because they're already deeply ensconced in financial services technology. They're making huge investments and the lone wolf isn't going to have a seat at the table to ensure that their imprint is contained in those AI solutions that are getting built. So, it's a triple risk. It's the relationship, it's the no seat at the table, and it's the being out of touch as the industry moves increasingly fast towards just better embedded AI solutions.

[00:19:36] Tom West: Yep. All right, so everybody, let me see if we can stick the landing on this Challenger Sale: Lone Wolf Path to Extinction. This is the first of a two-part podcast. To close out this particular first part of the Challenger Sale podcast, I want to foreshadow two things. The first one is, we're going to follow this right up with another aspect of thinking about The Challenger Sale, what the market is telling us about the application of artificial intelligence for the advisors.

But I also want to at least have everybody look forward to a new project that Suzanne and I are going to be working on with Advisorpedia that we're proud to be launching sometime over the summer. And this is going to be a shift for our advisor audience to a deeper exploration probably of the impact of technology, and the impact over a long career path for advisors with an aging population. I want everybody to look forward to a new platform and a new podcast that we're developing called Longevity Strategists. And there's going to be more to come on that. But just to land this particular podcast on The Family Financial Conversation, we appreciate very much your attention.

Forward this to other advisors, or even clients that you think might benefit from this. keep subscribing and we'll talk to you next time.

[00:21:09] Disclosure: Thank you for listening to The Family Financial Conversation podcast. Click the subscribe button below to be notified when new episodes become available. The information covered in the podcast represents the views and opinions of the guests and do not necessarily represent the views or opinions of Signature Estate and Investment Advisors.