The Single Most Important Thing I Learned from Successful Financial Advisors

Deep Dive: Journey Into Learning What Most Successful Financial Advisors Do

I’ve been on this journey for a some time now.  For the past 8 months I’ve been tirelessly interviewing and engaging Financial Planners to understand what is it that they are struggling with.  I’ve spoken with people in eight countries now, in Australia, Canada, the U.S., South Africa, India, U.K., Italy and Netherlands.  It’s been tremendous and I’ve been so grateful for the opportunity to connect with the most altruistic, deeply compassionate bunch of people I’ve ever met.  While it is a job, a business to be a Financial Planner, what I’ve found is that, it’s much much more than that.

What I’ve set out to learn was to understand challenges that FA’s face.  A sample of the questions I’ve asked are:

  1. Like what are the headwinds in the industry?
  2. What do you struggle with in your day-to-day activities?
  3. How do you measure you successes (and failures)?
  4. What kind of metrics do you track to know you’re running things smoothly and which direction your practice is going?
Unexpected and Delighted Findings – A lesson from the Most Successful Financial Advisors

The result is that I got lot of responses back.  Some of them the same, some of them the age old, highly technical issues that all Financial Planners face.  And to each their own, each planner has their own way of doing things that are unique to themselves and their practice.  But the one thing I heard the most and also the one that heard throughout all successful planners was somewhat unexpected to me.  It surprised me and at the same time it delighted me to think that this happens to be something that makes them as successful as they are.

Financial Planning as an Art and a Science

Before I think into the specifics, I want to just write about what the most successful Financial Advisors are obsessed with.  In the previous articles on Building Trust with Clients and #1 Tried and Tested Way to Drive Referrals From your Financial Advisory Clients I talked about how Trust is the foundation for the way clients feel engaged.  All successful financial advisors know that building trust, building a real long-lasting life-long client is a ART and a SCIENCE.  It’s this mix of skill, experience and knowledge.

Now, the art part is something that can never be replicated.  That’s why all this talk about Robo-advisors in the market taking share away from human financial advisors is misunderstands what Financial Planning fundamentally is all about.  (Michael Kitces is right on the money about this.)

Physical Fitness, Financial Fitness – An Analogy

silhouette-74565_640Allow me give you an analogy of someone with the goal of wanting to become more fit, more athletic.  You can “google” all you can on this information, on how to lose weight, on how to train.  You may even take that up all you learned and be motivated to do it for a time, but we all know how easy it is to fall back into our previous status quo.  It’s not that we don’t have enough knowledge or information out there on how to do something, what we lack is often the motivation and the conviction to do something.  And that’s just human nature for you; when left to our own devices, we often fall back on our vices.  Not that it is good or bad per se, it is only “bad” insofar that we have set a goal that we couldn’t sustain, try as we might.

You don’t need me to tell you this because if you have any experience as an advisor you’ll realize that that’s where your true value lies.  As a financial coach, you provide not only the technical know-how in various financial matters, but most importantly that you ARE their external and much needed motivator that keeps them ON TRACK.  We stray, and you gently pull them back, course correcting all the way.

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The Single Most Important Lesson from Successful Financial Planners

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This brings me to what the most successful planners do.  It’s kind of obvious from the analogy that I just gave.  The most successful financial advisors is provide the motivation to their clients.   Specifically, it’s about providing recognition for the things that were done to achieve their goals and in a gentle way. This does a few key and most important things:

  1. Build Trust that the advisor has their client’s interest at hand
  2. Confirms to the client that the goals set out by the client is well-understood by the advisor
  3. Doesn’t make the client feeling like a failure for not following through certain recommendations.
After all, no one wants to know that they are always failing and not meeting their goals and actions taken to achieve them.  Who wants that?
Recognition Changes Everything
Appreciation changes so much.  In a white paper published by the world-renown human resources consulting firm Towers Watson has found how appreciation between managers and employees can change organizations (for those of you who belong to multi-advisor practices.)  It’s all based on effective engagement.  It all comes from appreciation and recognition of a job well done.
While this applies to employees in a slightly different context, the basis of the research is in behavioural psychology and i think is more than relevant to use in the client-advisor relationship.  Here is an extract that says it all about engagement, trust, motivation and recognition:
Recognition has a prominent place among the manager actions that create uplifts. In workplace research on the effects of manager behavior, people report increased levels of respect and admiration for managers who consistently provide uplifts for them throughout the day. People who experience this small flow of positive events — a word of praise, an expression of confidence, a tidbit of useful information — also say they are motivated to work harder and are more likely to go out of  their way to help their peers or take action that supports the organization. Of course, the reverse  is also true. Managers who fail to recognize employee success, or who are disrespectful,  arrogant or uncommunicative, create downdrafts in employees’ emotional states. These yield  predictable and opposite results: lower job satisfaction and more withdrawal behaviors such as absenteeism and turnover.Tower Watson Research paper

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Key Takeaway to be a Successful Financial Advisor
helping handRecognition, encouragement are the secrets to how a financial advisor is sustainably successful.  If you recognize the constructive efforts that the Advisor-Client relationship has produced at the outset and throughout the relationship, you can achieve a strong engagement.  It’s a emotional state.
The opposite is true — lack of praise or expression of confidence or useful information on how to create a better financial life results in disengagement and a downdraft in emotional state.
And that’s what the most important thing to do become a successful Financial Advisor.  Learn how you can incorporate powerful Financial Reminders and Recognition to your Clients by signing up for the Beta below:

Want a simple System on how to Drive Client Recognition?

Interested in Simple Recognition and Encouraging Moments for your Clients, sign up for 30-day trial to see MyPlanMap in action.

eugeneThe Single Most Important Thing I Learned from Successful Financial Advisors