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I have a young planner I work with. He has chosen me as his mentor. Although he knows very little, he is bright, enthusiastic and compensates for his lack of technical knowledge through his good social skills and enthusiasm. This is a version of a note to him summarising our discussions over the last two years.
I have been working with financial planners since 1983. I have met several I would describe as great. If I synthesise what I have learned into an essential list, this is it. The ten relationship building blocks to create trust based relationships.
Set your standard beyond advice regulation. Regulation is a necessary, minimal but not sufficient, attainment. Strive to work as if you are on the same side of the table as your clients. As one of my Australian colleagues argues “Advise as if every client is your mother!”.
Surround yourself with people who are better than you. If you can afford it, hire them. If you can’t, read what they write and listen to them. Follow them on Twitter, Blog or conference platform. Be it technical, tax, investment, sales, communication or marketing don’t settle for second rate.
Learn to question and listen. Every client’s needs and circumstances are unique. Most will struggle to describe them without help. The great planners talk with with their clients regularly. My American subscribers call these “authentic conversations”.
Specialise. Become the expert on one client segment. Know the drivers, demographics, patterns and rules that relate to that segment and the experts you can work with. In the case of my young colleague because he is from mainland China it will be international tax, migration law and ethical financial planning.
Communicate consistently on your site, business card and verbally what sort of clients you are looking to work with and what you will do for them. Don’t work with those that don’t match your service offering.
Never treat couples as a single entity, not only is it legally risky, it is ethically wrong. Each partner is likely to have different goals and aspirations. Respect for individuality is the heart of great advice.
Run the cash flow numbers. Explore alternative behaviours. Help clients understand the consequences of working longer, spending differently, establishing alternative goals. Investment recommendations are the final outcome of this trade-off process.
Offer explicable portfolios. Clients must be able to give their informed consent to the risks in both their financial plan and their investments. Clients control the plan, the markets control the investments. Frame investment returns and volatility from the client’s perspective.
Reciprocity. You will receive much more than you will ever share in your professional and business life. Work to maximise what you can share. In return you will find that referred client’s will emerge who are easy to manage and already have a view of the value you bring.
Financial planners have a great opportunity to become recognised as one of the trusted professions alongside teaching and medicine. I am not talking here of financial planning in just the better portfolio or tax arbitrage sense but the life changing sense. I am referring to the life planning, goal setting behavioural change that emancipates just as the two other professions frees their pupils and patients to have richer, more relevant lives.