Finally, industry regulation and public demand is at the root of shaping the future of the financial services industry, specifically related to how advice is being given from a fiduciary perspective, and I couldn’t be happier. For much of our nation’s history, and most of our lifetimes, people have followed a predetermined path. A path set forth by the basic human survival instinct. First and foremost, people worked hard to earn a living and protect their families. The edges of the path became a set of blinders as they navigated the road ahead. The emotions and thought processes that accompanied the journey filled their conscious minds. During this phase, people may have dreamt of and planned for financial independence, but they didn’t take the time—or allow themselves the luxury—to consider how life would unfold once it was achieved.
As a result, the affluent and super affluent arrive at the point of financial independence longing for clarity and tasting introspection at greater depth than ever before. Where they once approached wealth as an end game, they now begin to grasp that it was simply a means to an end. Where they had anticipated that wealth would represent freedom, instead it now poses larger and more troublesome questions. What will replace the intensity with which they approached their careers or businesses? What will fill their days and stimulate their minds? What will they do with their excess wealth? How much is excess? How can they provide for their children and grandchildren yet protect them from the evils of affluence? Should they purchase another home or allocate more to charity? And how will society react to the inherently visible decisions they’re about to make?
People are wrestling with the most intense decisions of their lifetimes, and advisors are eagerly searching to develop skills and refine their processes to be better prepared and positioned to facilitate this need to discern good decision making and outcomes. Advisors must possess a process for carefully, respectfully and effectively taking these relationships to a point at which each client considers them a sounding board in this new and fearful realm.
At the same time, most advisors have spent their careers focused on money as the object of their bounty, building assets under management and charging fees for planning services. Their business has a starting point and a finish line for each service rendered and each plan that’s implemented. These become their own set of blinders that stand in the way of their ability to help clients get their arms around the emptiness and begin to fill it with a new life plan.
Advisors who wish to remain front and center in their best clients’ lives, and to build more and more of these relationships each year, need to address a new planning paradigm. Many affluent clients are finding themselves without any meaningful financial goals to work toward, paired with a lifetime of wisdom and intellectual capital to apply to something. They crave answers to the questions that their subconscious is posing. They yearn for a way to channel their financial resources in new and meaningful ways. Advisors need to prepare themselves to help them get there.
The challenge here is that advisors are trained to think rationally. They are taught to have a somewhat scientific relationship with their clients, one that follows the tax code, laces itself through legal guidelines, and follows creative design solutions. Though many clients confide in them, they have not traditionally been paid to dream big, brainstorm, and listen for hours on end. Certainly, those who’ve reached the upper echelon of the profession have built deep and meaningful relationships, but a small percentage of their time together is spent helping clients shape their non-financial future – the one that primarily occupies their minds. It’s time for this to change.
A Chance to Differentiate
In today’s changing landscape, I have more and more advisors asking me, “Todd, how can I be different?” While I believe this question has merit, I believe it’s a bit misguided. I am quick to tell there are several things you can do to be different, but the best advice is to focus on making a difference. By leading with a true intension of making a difference in the lives of the clients you serve and putting their outcomes ahead of your income, you will be different all day long. If advisors make their time together with clients different than the interactions they have with any other advisor, they will make the time to be in the advisor’s presence. Consider the times in your life when you’ve gone through a major transition. Think about the one person who was there to help you absorb the pain or perpetuate the excitement. Weren’t you drawn to that individual?
People need sounding boards. Without any meaningful financial goals ahead of them, that drive has been replaced by a tremendous void. They have more time for introspection than ever before. It is both invigorating and uncomfortable. Their newfound freedom feels like a prison. Where they once thought wealth would offer freedom, it instead poses more questions: questions that carry greater complexity, weaving family, society and business into a tangled mess. Advisors’ inability to truly grasp this phenomenon leaves clients meandering through this troublesome state alone. The smart advisors are racing to figure out how to more intentionally, more frequently, and with greater skill, lend a helping hand.
The Things We Know to Be True
At some point, everyone contemplates life’s greater meaning. It’s a function of being human – of the sociological make up of our conscious minds and our care for others. For some, the questions tap them on the shoulder daily. For others, their senses have become deadened by the routine pursuit of their financial successes. Once advisors spend a little less time designing plans and a little more time helping clients identify the underlying questions, they’ll find out where they really are in life and what they want most from the relationship with their trusted advisors
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Todd Fithian is the Managing Partner of The Legacy Companies, LLC. “Client- Centered Qualitative Discovery is at the core of all we do and it has revolutionized the way the industry thinks and operates; it has changed the way advisors and clients communicate. Through workshops, consulting, proprietary tools, software and online training modules, Legacy provides advisors to families of wealth with an innovative turnkey system of providing clarity where their life intersects their wealth.” Visit www.think-legacy.com or call (888) 649-4591 to learn more.