How An “Abundance Mentality” Drives Top Advisors
August 24, 2015
by Dan Richards
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According to a recent interview, Corsair Capital's founder Jay Petschek did not plan to be a hedge fund manager. After holding various roles on Wall Street, Petschek decided to launch the fund in January 1991, when his family and friends were asking him to buy equities on their behalf. He realized the best structure for Read More
Hard work, talent and luck drive top advisors. But research from Adam Grant, Wharton’s top-rated faculty member, shows there’s another quality high on the list – an “abundance mentality” and a generous mindset. Grant’s work, summarized in the book Give and Take, demonstrates that the most successful and productive people in organizations are “givers” rather than “takers,” provided that they operate within some clearly defined limits.
Abundance thinking versus a scarcity mindset
Many advisors have worked with older clients raised during the Depression. Scarred by that experience, many of those clients had a scarcity mindset for the rest of their lives. Pinching pennies and frugal to a fault, they were suspicious and anxious that someone would take their hard-earned savings. Many clients maintained this scarcity mindset even when they became very wealthy. Talking to clients with a scarcity outlook about charitable giving was typically a tough sell. And these clients often had a win-lose mindset in negotiations; the more someone they were dealing with received, the less was left for them. (That could lead to acrimonious conversations on things like commissions and fees.)
Clients with an abundance mindset take a very different view. Rather than squabbling over how to cut up a pie, their goal is to work collaboratively to create a bigger pie. They want the people they do business with to do well, taking the view that if their partners do well, they’ll do better also. And as a general rule people with an abundance mindset have a more optimistic view of other people’s motivations and of life in general.
This division between a scarcity and abundance mindset extends to financial advisors. Even some very successful advisors take a scarcity approach, instinctively putting every request through the filter of “What’s in it for me?” These advisors are reluctant to participate in panels at conferences in which they share their best ideas (after all, other advisors might steal them) and will sit down with younger advisors looking for advice only under duress. They often experience higher turnover in staff, as they pay the bare minimum required to keep people from leaving. And these advisors are the least likely to take leadership roles in local charities unless they see this as leading directly to more business.
Advisors with an abundance mindset operate very differently. While their focus is still on building a profitable business, they are more generous with their ideas, their time and their compensation for their team; their staff retention rates are higher as a result. These advisors are also more likely to get involved with community activity, even if there’s nothing in it for them in the short term.
When abundance-mindset advisors sit down with existing and prospective clients, their first focus is on solving problems, even if that solution doesn’t lead to short-term income. Often these clients develop reputations as “connectors,” where they will refer clients to resources in the community that can help them if they’ve run into challenges, even if those challenges are outside the financial realm.
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