Most financial advisors got into the industry because they wanted to help people. That’s truly the motivation for most of us. We want to help people meet their financial goals and live their best lives – we want to make sure they’re financially ready for whatever life brings.
But have you noticed that, too often, it doesn’t really turn out that way? Maybe the people we’re advising don’t listen to our advice. Maybe the products we’re trying to sell them aren’t really a good fit for their needs. Sometimes, perhaps we feel like we have to scare them just to get a sale.
Whatever the reason, you’ve probably noticed that traditional wealth management fails clients.
The good news is that financial advisors can do things differently. We can help our clients-which, after all, was one of our biggest reasons for becoming a financial advisor-in a truly authentic way. All it takes is rethinking how we interact with each other.
It’s About the Person, Not the Package
Years ago, Swiss banks began selling US dollar denominated life insurance policy “packages” backed by US dollar timed deposits or other dollar savings plans and Japanese yen-based financing. When these structured plans were first established and sold, the economy of the world perfectly set the stage to inspire dramatically valuable results. Advisors couldn’t resist selling them and the wealthy couldn’t resist buying them.
Over time, though, the world economy changed, as it always does. Currencies and interest rates fluctuated, and the dynamic between US and Asian economies shifted. As this dynamic shifted, so did the overall effectiveness of these packages. They were no longer suitable for the people who had purchased them. They began to fall apart.
The financial advisors who sold these packages were focused on the products’ immediate sex appeal and relative compensation instead of on their clients’ long-term expectations and hope and market realities. In other words, they were selling the packages because they found them attractive, not because they were actually the best option for the client.
A Sexy Package That Quickly Loses Its Sex Appeal
Plans that rely on elements of a particular economy only work while the economy remains the same, and that is never the case. Amazingly, packages like the one I described are still being created by different banks and insurers, because financial advisors find them intriguing and profitable to sell.
I see this happen time and again in the financial world. These packages are often structured products of greed, not need. On the surface they can look like the cure-all to every financial woe and the direct line to certain prosperity.
Usually they aren’t the panacea they’re marketed to be, though they can make the bank and the financial advisor a lot of money while providing less than what people truly need to satisfy their wants.
Ultimately, financial products are a place to put your money so it’s there and maximized for you in certain situations. They’re nothing more than that, and you shouldn’t kid yourself or anyone else into thinking that they are. It’s your client’s life that matters, not whether you sell a product.
It’s their goals that matter, not yours.
When I remove my personal goals and opinions from the mix and focus on my clients, I maximize my ability to call on and provide the professional acumen required to help them get closer to what they wish for in life. Anything less is an obstacle in the process of successful financial advising.
If You Want to Help Your Clients, Educate Yourself
My team and I spend a lot of time educating advisors and learning from them, too. We meet with other investment experts regularly. Those we partner with understand the value and the risk of each type of offering to avoid promoting anything that detracts from catering to their and our shared clients’ desires, and we make sure we have the same understanding.
Here’s where we break away from traditional wealth management, and where I suggest you do too. Instead of just focusing on whether a package is attractive to you, learn everything you can about it. Then, learn everything you can about your client.
When you continuously learn and grow, you become more valuable to other advisors, your clients, and theirs. Treat people like family, and help them confront the reality that some policies or structured products may seem attractive and are therefore easy for you to sell yet may fail to serve their best interests.
The bottom line is that the best plan is the one that provides whatever the people who look to you for guidance need in order to get what they want. People desire different things for different reasons, so it’s imperative to look at every one of them individually.
Stop looking at products and spending precious time to figure out how they might fit, and instead look at the situation and goal, figure out what clients seek, and determine what they need to get it. This is the mindset shift that’s required for you to stop missing the mark.
Avoid Unintended Consequences
Selling people what you think is cool or filling an order for products that your prospects think are cool-which happens all too frequently in traditional wealth management-can lead to undesired consequences. They may not get what they’re looking for and what they trusted you to deliver.
Instead, approach your clients with a strong moral compass, with the goal of doing right. When you do that, the odds of advising them in a way that satisfies their desired outcome increases dramatically. And when you do that, you will find that your own success and satisfaction increase as well.
—For more advice, you can find Aloha Financial Advising on Amazon.