Why Helping Your Clients Know Their Number is an Old School Approach

Have you ever had a client tell you their number? You know, the net worth number that will make them happy. Or that number they ask you to calculate so theyll know theyll be okay?

Focusing on this number is outdated, a mistake and I contend will actually hurt someones chances of reaching their long term goals. Heres why:

You are encouraging your client to focus on the wrong thing. When someone focuses on a future number they arent focusing on what they need to do to get there. Unless they are planning for a short term liquidity event, such as selling a business or winning the lottery, having a big number in their head doesnt do anything to move them toward the goal.

Helping Clients Know Their Number is an Old School ApproachClients may very well use this number to gauge their progress. One of the positive impacts of goals is that they give us a target to move towards. One of the negatives is that when we dont hit them we feel as if weve failed. When we put our attention on missing a goal, our energy is on the failing as opposed to the achieving of the goal.? For example, if your goal is to drive to Denver and you hit a detour and find yourself in Birmingham it doesnt get you to Denver any more quickly by feeling badly youre in Alabama. Instead, if you get a map or use your GPS to guide you to your preferred destination youll have a much easier time actually getting there.

In his Psychology Today blog Ray Williams surveys various research articles looking at how goal setting doesnt work. He quotes L.A. King and C.M. Burton in an article entitled, The Hazards of Goal Pursuit, for the American Psychological Association. They argue that goals should be used only in the narrowest of circumstances: “The optimally striving individual ought to endeavor to achieve and approach goals that only slightly implicate the self; that are only moderately important, fairly easy, and moderately abstract; that do not conflict with each other, and that concern the accomplishment of something other than financial gain.”

Williams continues:? There is an addiction in our culture to getting more, the going for the goals hype is disconnected from peoples’ authentic selves, and their values.there are psychological manifestations of not achieving goals that may be more damaging that not having any goals at all. The process sets up desires that are removed from everyday reality. Whenever we desire things that we don’t have, we set our brain’s nervous system to produce negative emotions. Second, highly aspirational goals require us to develop new competencies, some of which may be beyond current capabilities. As we develop these competencies, we are likely to experience failures, which then become de-motivational. Thirdly, goal setting sets up an either-or polarity of success. The only true measure can either be 100% attainment or perfection, or 99% and less, which is failure. We can then excessively focus on the missing or incomplete part of our efforts, ignoring the successful parts. Fourthly, goal setting doesn’t take into account random forces of chance. You can’t control all the environmental variables to guarantee 100% success.

If youre not buying the danger of goal setting argument, then consider that making the number the goal is the wrong goal. People think that having a money goal will motivate them to achieve it. Actually, they are focusing on the wrong incentive. People may think they are motivated by money or advisors may think clients are, but really people are motivated by what they money will do for them. The money might help them leave a job they hate, pursue a hobby they enjoy, give to causes they believe in, etc.

Build better relationships with clients and do a better job supporting them in getting to where they want to go.The number is a meaningless moving target. I had a client who told me at our first meeting that his number was $5,000,000. When he got to $5 million he said, Oh, I guess that number doesnt really make me feel like Im there. I think its really $10 million that would have me feeling okay. Guess what, $100 million might not make him feel okay. The feeling of security or knowing that well be okay isnt typically related to the number, but rather our beliefs about what okay is.

As advisors, many of us create financial plans for our clients, run projections, make assumptions etc. We help our clients create a road map for their financial futures. Anyone who has been in business over the past ten years knows that our projections are just that, projections. The world often changes in ways we cant anticipate. What we are really doing for our clients by creating a financial plan is to provide them with a plan that satisfies their logical minds and really serves to ease their concerns about the future. When we can calm our clients worries we help them to make much better decisions with their money.

There are real benefits from the financial planning process. As advisors we need to expand our views about all the benefits a plan provides. When we move past the left brain logical benefits and expand our focus to the more right brain behavioral benefits well build better relationships with our clients and do a better job supporting them in getting to where they want to go.

As a 21st century advisor make sure you understand your clients well enough to know:

  • What they want their retirement to look and feel like.
  • The most important people in your clients lives and how they want to be involved with them in the future.
  • The causes important to your clients and what impact, if any, they would like to have on these causes.
  • How strong their internal barometer is for making adjustments in their financial lives based upon whats happening in the world.
  • What they really need from you to make solid financial decisions.

Helping clients to tap into their motivation behind their number will allow us to be much more effective in helping them get to where they want to go. People are motivated by avoiding pain and moving toward their passions. To succeed as an advisor in the coming years it will be crucial to expand the conversation from just the numbers to instead, focusing on intentions and passions. This is what it will take to truly move people closer to their desired outcomes.

Ellen Rogin, CPA, CFP
is the co-author of Great with Money: 6 Steps to Lifetime Success and Prosperity. She speaks and consults to the financial services industry on business building strategies and working successfully in the women’s market. To learn more and to sign up for Prosperity Tips visit www.ellenrogin.com.

How Behavioral is Your Big Data?

What if you could empower your sales and service people with bigger behavioral data that could generate 23% more revenue?

Many of my financial advisor coaching clients look at their CRM as a necessary evil. At times they can be frustrated with all the data input done for each client.

But like most things in life, when we run into frustration, we may need to change the lens to get a different view.

The key question to shift our view: What do you do with this data?

The standard response:? Marketing activities.Behavioral Data, CRM Behavior, CRM Personality, Behavioral Marketing

We email our newsletter to all the $250,000+ accounts, invite our $5 million clients to our annual summer wine tasting event and send out invitations to our clients who are 55+ to attend our pre-retiree lunch and learn programs.

Now, change the lens.

What if you could add a little personality to your CRM and take your marketing efforts one step further?? Imagine segmenting your 55+ pre-retirees by whether they are more goal or people oriented and then tailoring the presentation to engage each of those groups in a unique way.

As suggested in Using Big Data: Act Like You Know Your Customer, financial institutions have barely scratched the surface in creating unique client experiences.

The new behavioral business model requires your firm to go beyond the traditional demographic data and get beneath the surface of actions(one type of behavior) to the real core of personality (why you behave as you do).

Engage a client on their terms and you will have less effort, more referrals, and more compliant product recommendations.

Isnt it time to get bigger behavioral data at the point of sale to create a unique experience thats centered completely on the customer?

To learn more about client engagement, please visit the Financial DNA Website.


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The Importance of People Centered Leadership in the Financial Industry

Our leaders are too involved in understanding/unraveling complex regulatory issues to spend time leading…

In many parts of the world financial regulators are placing more and more constraints on the industry. From improving record keeping in terms of recording advisor/client conversations to alerting the industry about the need to understand client behavior over and above tolerance to risk; and many other change requirements in between. Add to this a far savvier client base and leadership may well find itself with no time to support advisors or even navigate the business through these complicated seasons.

But – the financial landscape is shifting – it’s all about communication and understanding advisor and client behavior. Today’s leaders are crafting a new and innovative direction for the financial industry.

Jackson was looking for something different in the financial industry; something edgier, something to raise his passion for the business

At this current interview he was asked to complete a behavioral discovery process (profile) customized for financial services. When completed the interview panel openly shared the outcomes in their behavioral reports with Jackson and the interview process began.Leadership in the Financial Industry

No reference was made to his credentials, his previous experiences, his challenges. All of that information could be found in his resume. The questions the panelists asked were customized to his behavioral style and pointed to his hopes of his future, how he would expect the leadership to serve him in terms of fulfilling his expectations for his career path.

They clearly knew from his behavioral report that he was strategic, driven and would undoubtedly have plans for his career path.

Jackson found himself fully engaged in what was now a conversation focused on what they as a business could do for him rather than what he could do for them.

As the interview process drew to a close the panel asked Jackson to comment on the way they had conducted the discussion. He responded that it was very different and he found himself responding to their questions by opening up areas of his life, his future plans, his preferred style of communication and so much more than he had ever intended.

The panel concluded by telling Jackson that this approach mirrored the way the company provided financial advice to their clients.? This approach was all about understanding the clients hopes, dreams, plans for their future in terms of their finances and then lining up advice and support that worked in partnership with them to achieve these goals.?? This approach set a platform to ask revealing questions to uncover and deliver real insight into the advisor/client relationship.

The leadership of the company did not believe in containing creativity and initiative with their advisors; they believed in harnessing behaviors and talents and matching them with clients so that relationships could be formed that not only lasted but also provided well targeted advice that delivered outcomes, built trust and formed strong client/advisor partnerships.? They also saw this approach as one that would deliver the advisors vision for future and thus ensure they retain high quality staff.

Not surprisingly Jackson chose to work for this company.? The leadership had crafted a meaningful vision; one he knew lined up with his own personal passions.? Six months later and Jackson has fully embraced this style of working with clients. His clients see completing a profile as a useful “icebreaker” and feedback has demonstrated their support for the process and their belief that the advice they are being given genuinely focuses on their personal strategies for their future and how best to create wealth to deliver these plans.

Learn more about adopting a people centered leadership approach – click here.

What Do Clients Want From Their Advisor?

Often we think that clients want higher investment returns from their advisor, and therefore that defines the role of the advisor. However, research shows that clients want a relationship. This has actually been the case for a long time but the research is becoming clearly stronger all over the world in the need for advisors to develop stronger interpersonal skills and emotional intelligence.

What Clients Want from AdvisorsRecent Trusted Advisor Research by Professional Planner magazine in Australia demonstrates that an advisors interpersonal skills and emotional intelligence are most important by 82% of the survey participants who were clients of Advisors of the Year.

Refer to the full article at: http://www.professionalplanner.com.au/research/afa-study-shows-eq-pays

There is no doubt developing your interpersonal skills grows the bottom line. In advisory business relationships are the key to revenue sustainability.

Many advisors are naturally results orientated in behavioral style and therefore naturally lower on relationships. But, the interpersonal skills can be learned with sustained effort, focus and investment. The starting point is behavioral awareness.

So, the question becomes why isnt there more sustained investment in developing the interpersonal skills and EQ of advisors? It seems there is still a strong over weighting towards technical training. When we see this change, trust in the industry will grow.

Our firm has recently been working with Advisors Ahead to deliver this type of training to financial planning students and young advisors. This is an important starting point but needs to go much further.

To learn more about how you can grow to become a behaviorally smart advisor, please visit the Financial DNA website.