Last year, in my book entitled The New Profession, I made a number of bold predictions about how the advisory profession is evolving, and what firms are going to have to do to stay ahead of the curve. The book talks about a transformation in how firms are marketing themselves to the general public, innovations and tangible ways to measure their levels of client service, how businesses can grow and evolve more efficiently, and insights that argue that active management is not as valueless an endeavor as some have suggested. Every chapter is accompanied by a power productivity tool you can use to become better at everything you do. (You can find e-copies and hardcover copies on my Inside Information website)
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So here we are today, in the midst of this rapid evolution. How have my predictions held up?
In some areas, the marketplace is already moving ahead of what I predicted. Here are three transformations that will force every advisory firm to adapt.
In a presentation last year at the AICPA personal financial planning (PFP) section’s summit, a panel of planning practitioners said that they had recently changed their initial onboarding process because too many of their clients had not been engaged in their own financial plan. Jean-Luc Bourdon of BrightPath Wealth Planning in Santa Barbara, CA said that, before any technical or portfolio issues are discussed, he now lets clients imagine their future life three, five and 10 years from today. He then guides them to work backwards to what they need to do financially and personally to get to this exciting destination. Bourdon said that clients really open up when they realize that that initial conversation is not about their assets or the markets, and they move forward with a great deal more enthusiasm at each stage of the planning process.
A more formal collaborative structure was presented by Mackey McNeill, of Mackey Advisors in Bellevue, KY. McNeill meets with clients four or five times in the initial engagement. In the first meeting, she simply invites them to tell her what prosperity means to them, and she types whatever they say onto a display on a big screen in her meeting room. In almost every case, the clients then do something tremendously revealing: they ask if, please, they could change what they said to something closer to what they mean.
Consider what that means about how clients view the power in the new client-advisor relationship. They believe they need your permission to better refine their own definition of a prosperous life. No wonder they often feel like the financial plan they receive is not their own!
At the end of that first meeting, McNeill will ask clients to come into the next meeting with a list of their goals in life – not just financially – and, where appropriate, to estimate what they believe the cost of those goals to be. These will be put up on the big screen at that second meeting, clients can make adjustments and refine the wording, and McNeill’s staff will use account aggregation software to upload portfolio balances into her planning program.
In the third meeting, clients will do something radical: they will actually hold the mouse and make changes to their financial plan – essentially bargaining with the future by deciding that they can live with a less expensive car, retire a year or two later or save more between now and retirement.
Read the full article by Bob Veres, Advisor Perspectives