‘Practice Management’ Archive
3 Ways to Tell If You’re Running a Smart Business – Part 1 of 3
Basically, there are three ways to build a business in the financial services industry. What kind of business are you running? Here’s a three-step litmus test to help you find out.
1. How full is your appointment calendar? Are you spending your time prospecting and marketing because you’re not earning the referrals you’d like? Are you meeting with people three or four times before they hire you? Are you sitting down with clients to discuss irrelevant, superfluous topics that waste your time and theirs? If you answered yes to any of these questions, you’re running a dumb business.
Don’t allow your clients to pull you into discussions about what I call financial pornography. If I was your financial advisor and you wanted to have a discussion about how the war on Iraq was going to impact the market, I would not even entertain that conversation with you. Instead, I would explain to you why that’s a waste of your time and mine, and remind you that we have an investment philosophy where we focus on what we can control. I would also remind you that we have a long-term financial strategy, so regardless of what happens in the economy, the market, or the world, my job is to help you achieve your goals for the reasons that are important to them, not time the market.
Although this flies in the face of conventional wisdom, educating clients is a waste of your time and theirs. Discussing the war in Iraq as it relates to investments is academic. It’s not practical and it doesn’t alter the outcome of your clients’ investments. At most, it provides nothing but a false sense of security. “But it makes the clients feel comfortable,” you might argue. Well, do you want to be in the business of giving your clients a false sense of comfort, or telling your clients the truth?
Telling the truth is actually an interesting and surprisingly effective marketing strategy. When you take a rational approach—when you have rational discussions with rational people—they respond rationally. If you’ve got an irrational approach to try to move irrational people to buy investments and insurance from you, you’ll end up with a high-maintenance clientele and your primary function will be to accommodate their baggage. There’s a whole group of advisors who say, “Yeah, that’s what it’s like to be an advisor. You have to accommodate people’s ineffective and false beliefs.” If you want to run a smart business, don’t focus on educating clients and having these kinds of conversations. Instead, fill your appointment calendar with meaningful, rewarding engagements.
Success Leaves Clues (Don’t Shoot the Messenger) – Part 3 of 3
Here’s what else that I have learned about Universal Truths and Natural Laws:
You can’t change them. You can’t fight them. They have no emotion. They have no investment in whether or not you succeed or fail. In fact, they don’t care if you live or die. It’s impossible for them to care about you because they don’t even know you exist. They don’t care about your background, your upbringing, your personal story, your personal tragedies, or your strengths and weaknesses. They don’t care if you suffer from depression, addictions, or were abused as a child. They don’t care about your race, your religion, your gender, your age, or your heritage. They don’t care if you grew up poor, middle-class or wealthy. They don’t care how unique you are, how special you are, or how important you are. They don’t care how much potential you have. They don’t care how much you are loved by your parents, your grandparents, your children, your spouse, your friends, your pets, or how much you love them back. They don’t care if you are attractive or unattractive, healthy or unhealthy, fit or out of shape, able-bodied or disabled. They don’t care how smart you are, how experienced you are, or how much you care about helping people. They don’t care if you are having a bad hair day or a no-hair day. They don’t care if your house burned down, your spouse left you, or your dog died. They have no interest in your needs, your wants, your goals, your aspirations, or your values. They don’t care about your religion, your faith, or your beliefs. They don’t care how much value you bring to your community or how much of a difference you are making in the world. They are not mean or malicious. They have no agenda. They don’t have any emotional capacity to be concerned about anything or anyone. They are what they are. The Laws of Success. Universal Truths. Natural Laws. Please don’t shoot the messenger. None of this is my idea. It is what it is.
There are simply Universal Truths and Natural Laws that exist for every Financial Advisor who chooses to be successful at acquiring and serving clients.
To whatever degree you choose to deny, resist, or fight Universal Truths and Natural Laws is the degree to which you will fail to achieve your potential. Whatever time and energy you expend to change them or resist them is wasted time that you will never get back.
Surrender to these laws and you will immediately experience more inner peace. Embrace these truths and you will move to a higher level of professional success and happiness in life.
Commit to developing more skill, more confidence, more emotional fortitude, and more discipline in each area described above and you will soon be enjoying far greater results.
And, remember, don’t shoot the messenger. None of this way my idea. I didn’t get a vote either. I’m just trying to help and do the best I can on my journey… just like you.
Success Leaves Clues (Don’t Shoot the Messenger) – Part 2 of 3
As with the Rule of 168, there are Natural Laws and Universal Truths about what is necessary to be a successful Financial Advisor. I did not invent these truths any more than I had input into how many hours there are in a day or week. I have just been a diligent observer taking good notes. This may not be a complete list, but I doubt you will disagree with anything on it. What you do with this information is your choice. Remember, don’t shoot the messenger.
- Must have the skill and confidence to engage people in conversations that could lead to the next step of them potentially doing business with you. These can be with people you already know, people you meet in the course of your everyday life, or referrals. The result of these conversations must be enough appointments on your calendar to yield enough clients to make your business successful.
- Must have the skill and confidence to conduct an initial client interview where you establish a bond of trust and the outcome is that a high enough percentage of these people hire you so your business is successful.
- Must have the skill and confidence to answer any question any prospect, or client, could ever ask at any time.
- Must have the skill, confidence, and resources to create a plan of action that gives your clients the highest probability to achieve their goals.
- Must have the skill and confidence to articulate how much you charge, what they get, and that it’s a good value for them.
- Must have the skill and confidence to set the right price for your services so your business is successful and your life works.
- Must have the skill and confidence to give advice to clients about the necessary action required for them to achieve their financial goals in a way that inspires them to act.
- Must have the skill and confidence to conduct regular, productive progress meetings with your clients so they stay on track to achieving their goals.
- Must have the skill and confidence to have crucial conversations with your clients when they become “their own worst enemy” and want to do things that are not consistent with them achieving their goals.
- Must have the skill and confidence to build and lead your team of the Technical and Administrative Subject Matter Experts necessary to deliver on your promise to your clients. (The Rule of 168 mandates that there is not enough time to do it all yourself.)
- Must have the skill and confidence to conduct referral conversations that generate referrals.
- Must have the skill and confidence to make follow-up phone calls and engage the people, to whom you have been referred, in constructive conversations that could lead to the next step of them potentially doing business with you.
- Must develop the skill and confidence to recognize high pay-off activities, fill your calendar with high pay-off activities, do the high pay-off activities, and delegate or drop lower pay-off activities.
- Must develop the emotional fortitude and discipline to develop these skills and confidence.
- Must be willing to learn these skills from others if you were not born with them.
- Must develop the emotional fortitude and discipline to consistently and repeatedly implement the skills and confidence that produce results both on the days when you feel like it and the days when you don’t feel like it, regardless of events out of your control such as what’s happening in the market, the economy, or the world.
- Must document the processes and systems that will be repeatedly used to acquire clients, serve clients, and lead the business.
- Must generate enough business revenue, so after paying your business expenses and taxes, there is enough money left to pay for you to live a good lifestyle now and enough money for you to fund your future goals, such as your own financial independence. In other words, you have enough money to get and keep your own financial house in order.
- Must develop the ability to produce these business results in a reasonable amount of time per day, week, month, and year in order for other important aspects of your life to get the attention they need and to be enjoyed. Ie: family and friends, health and fitness, fun and recreation, spiritual growth, mental health, philanthropy, etc.
Perhaps you can think of a few other “musts” in order to have a successful financial services business. This list truths will at least get you started.
Success Leaves Clues (Don’t Shoot the Messenger) – Part 1 of 3
You have probably heard the saying that success leaves clues. These “clues” are Universal Truths or Laws of Nature that we observe successful people following that provide a good example of what to do if we would like to be successful also. These are things we accept as being true and unchangeable. Some of the more obvious Universal Truths or Natural Laws are that humans need to breathe air to survive, gravity, and that water is wet.
Another such Natural Law is what I call The Rule of 168. There are only 168 hours in the week and your success and happiness in life are determined by how you choose to invest your 168 hours. This was not my idea. God did not confer with me when he or she decided how long it would take the Earth to make a complete spin on its axis or the time required for the Earth to revolve around the sun. It is what it is. Resistance is futile. Please don’t shoot the messenger.
Jack Nicholson’s character (Colonel Nathan R. Jessep) in the movie A Few Good Men delivered one of the most famous lines in the modern movie era, “The Truth! You can’t handle the truth!” I propose that life is better when you choose to handle the truth. Success is leaving clues about the truths required to be successful. Are you listening? Do you see them? Will you choose to handle the truth?
What are the Short-Term and Long-Term Consequences of Making Good Business Decisions?
In her soon to be released book, “Living Life with No Regrets,” my wife, Anne, interviewed Denis Collier. Denis is a registered dietician and certified exercise physiologist. One of the questions she asked Denis is, “What is the impact of choosing not to lead a healthy lifestyle over the short-term and long-term?” His answer can have a profound positive impact on your business health and fitness also. He said, “This question really gets to the root of the cause of why people often choose NOT to do the healthy things. The key is this – there are minimal short-term consequences to making the unhealthy choice. In fact, quite often it is just the opposite: the unhealthy choice is the one that is most pleasurable. This applies to many things in life, not just health and fitness.”
In another part of the interview Denis continues, “Few individuals can honestly say that eating a spinach salad generates the same immediate pleasurable sensation as eating an ice cream sundae. On most nights, it is immediately easier to go home and curl up on the couch instead of going for a workout in the gym. It is only in the long-term, after a lifetime of such choices, do the negative consequences rear their ugly head. My friend, who has lost a great deal of weight, said it best when asked how he, an intelligent, successful man, could have allowed himself to go through life so obese for so long, ‘I knew that it was probably going to kill me, but I also knew that it probably wasn’t going to kill me tomorrow!’”
Denis continues, “The key term we could all benefit from exploring is that of delayed gratification. We need to shift our focus from the pleasure that we will immediately get from the unhealthy choice, to the more fulfilling life of abundant health and energy that will surely come to us if we choose to make the healthy choice.”
And the same is true for making good business decisions, isn’t it? It’s easier to read an article about the market or the economy. It’s easier to do research about the next great technology tool. It’s easier to help your assistant do an administrative task. If you don’t ask for referrals today it isn’t going to kill your business. If you don’t make follow calls today it isn’t going to kill your business. If you don’t improve the value you deliver for your clients today it isn’t going to kill your business. If you don’t get more organized today it isn’t going to kill your business. If you don’t hire a great assistant today it isn’t going to kill your business. Etc, etc, etc. String those days together, however, and after a few years you find yourself smack, dab in the middle of mediocre-land. Mediocre production. Mediocre qualify of life. Mediocre clientele. Mediocre value proposition. My guess is that you didn’t enter this business intending to put down permanent roots in the heart of mediocre land.
So, what can you do about it? Take it one day at a time. The beauty of it being easy not to ask for referrals today is that it’s also easy to start asking for referrals today. Today you can make follow-up calls. Today you can improve your value delivery. Today you can get more organized. Pick one or two things and do them today. Today you can also stop doing one or more of the many things that do not move you toward your goals. And then you can do what you know moves you towards your goals again tomorrow.
And while you’re at it, feel free to do the same with your health and fitness. Make it a great day… today.
3 Ways to Earn Your Clients’ Trust (Part 3 of 3)
3. Tell the Hard Truth
If your clients don’t defer to your authority and expertise, there’s a good reason, and it’s not them. Chances are, it’s because you’re behaving like a salesperson. Instead of communicating with conviction and earning your clients’ respect, you’re following the old “customer is always right” mentality. Even though your clients may have little or no financial expertise, you defer to them rather than take the chance of upsetting them and jeopardizing your insurance or mutual fund sale.
I spend a lot of time coaching my Trusted Advisors to tell the truth and be direct. At first, many argue, “I’m afraid of how clients will respond if I tell the truth.” I understand that. However, if you want to be a Trusted Advisor, you have to tell the truth—even when the consequences are less than desirable. Think about it this way: If you tell people the truth and they respond poorly, do you really want them as clients? Most people appreciate and respond positively to the truth; honest communication is a cornerstone for building trust.
3 Ways to Earn Your Clients’ Trust (Part 2 of 3)
2. Ask Better Questions
Have you ever noticed that most people would rather talk about themselves than listen to you talk about yourself? If you want to build a high-trust relationship, shallow chitchat or talking about your credentials won’t do it. You need to talk about what’s meaningful, important, significant, and compelling to that person. One of the best things you can do to prepare for that kind of conversation is to gather information in advance. Anytime someone refers a potential new client to you, ask the referring person questions that will lead to meaningful, important, significant, and compelling information. Find out as much as you can about your prospects: What are their values, interests, passions, and goals? What do they do for fun? Who do they care about most? When clients or prospects see the connection between the value you bring and what’s most important to them, they tend to respond positively. In the process, you lay the foundation for a long-lasting, high-trust relationship with the people you truly want as clients.
Five Great Words Made Even Better In Action
Commitment.
Consolidation.
Coordination.
Simplification.
Confidence.
Here’s how you can put these powerful words into action to communicate with your clients and prospective clients the value of having a Trusted Advisor leading a team of Best-in-Class Subject-Matter-Experts for their benefit.
True commitment is the key to any successful program, process, and relationship. When you make a commitment to truly comprehensive financial services and commit to implementing the advice of your team of your Best-in-Class Subject-Matter-Experts led by your Trusted Advisor you will get your entire house in perfect financial order and keep it that way forever.
Regardless of their success or wealth, we estimate that less than 1% of people in the world actually have their entire financial house in perfect order. You can be one of them. This will not happen by accident. It happens by commitment.
Consolidation means that everything is organized together. You no longer have multiple relationships with different institutions that you have to manage and keep track of. Everything is in the hands of one team of experts, led by your Trusted Advisor, so all decisions are made with complete visibility to everything you have with your goals and values in mind.
Coordination means that there is synergy between all areas of your financial life and the expertise necessary to make smart choices about your money in alignment with your goals and values. Your Trusted Advisor is involved in every element of your financial life coordinating with you and the appropriate experts. Every member of your team: financial planner, tax experts, legal experts, insurance experts, money managers, etc. are always aware of your complete picture so you get the best advice possible.
Simplification. Your commitment to all of your financial affairs being consolidated and coordinated makes life for you and your family much simpler. Therefore, you can relax, enjoy your life, and do the things that are much more important in life than worrying about your money.
By making a commitment to consolidation, coordination, and simplification you also gain confidence. Confidence about your future. Confidence that your team of experts will make certain that nothing falls through the cracks, ever. Confidence that no matter what happens in the market, the economy, or the world that you have the highest probability of achieving your goals because your Trusted Advisor and your team of Best-in-Class Subject-Matter-Experts are giving you the best advice possible under all circumstances. You are confident that you will achieve your goals and fulfill your values.
Continue your journey of implementing the Values-Based Financial Planning® Turn-Key Business Model. If you do not already have the systems and processes to earn commitment from your prospects and clients to hire you to consolidate, coordinate, simplify, and be more confident about their future, contact one of our coaches at (858)558.3200 or email SRMinterview@baivbfp.com for a complimentary consultation.
Fiduciary Standard?
The headline reads: “Wall Street wins big as Dodd drops fiduciary provision.” And the first line of that article is “Chalk it up as a win for the securities and insurance industries.” How do the securities and insurance industries win when the client loses? It’s a fascinating way to view the world, but not surprising. Here’s my translation: “the lower the standards the easier it is for us to manage our advisors, salespeople, and agents.” It’s the usual product-oriented, fear-based thinking from our industry at-large and it proves, once again, that you have a competitive advantage as an individual Trusted Advisor who chooses to put the client first. Can you believe what you just read; you have a competitive advantage by putting the client first? Yes, you do. Doesn’t everyone put the client first? Apparently not. Amazingly enough, our industry considers it a win when they don’t have to adopt the highest standard of care for their clients. Wow.
Here’s what Wikipedia has to say about Fiduciary:
“A fiduciary duty is a legal or ethical relationship of confidence or trust between two or more parties, most commonly a fiduciary and a principal. In a fiduciary relation, one person, in a position of vulnerability, justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests.
A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.
A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the ‘principal’): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust.”
Sounds like the perfect standard for the kind of advisor you are choosing to be. What do you think?
Keep Your Head Above Water: 5 Distractions That Can Sink Your Business
Keeping your head above water. Drowning in paperwork. Trying to stay afloat. Up a creek without a paddle. Smooth sailing. Have you ever noticed how many water-related expressions there are for describing the way you do business? That’s because it’s such a great metaphor, and one you can easily relate to.
Do an interesting little exercise using this metaphor. Take out a piece of paper, draw a horizontal line across the middle, and pretended it was a water line. Above the line, list all the activities that really matter in building a successful business. Below the line, list the distractions that could keep them from being successful financial advisors. Basically, only three activities belong above the line: acquiring clients, serving clients, and building your team.
ABOVE-THE-LINE ACTIVITIES
Nearly everyone agrees that brand-new advisors should spend a huge amount of time on client acquisition. Unfortunately, many established advisors think the rule doesn’t apply to them. They often ignore this crucial above-the-line activity. Instead, they spend their time on all the activities below the line and soon find their businesses starting to go under.
The second above-the-line activity, serving clients, simply means delivering what you’ve promised. Meeting your clients’ expectations is an absolute must for keeping your head above water. This includes ensuring the timely delivery of financial plans, money management services, and advice about insurance, budgeting, debt reduction or elimination, cash management, and emergency reserves.
The third above-the-line activity is building your team. This means organizing your employees and creating successful relationships with outside resources who can provide the services your clients need.
Basically, that’s it. Unless you’re doing things to acquire clients, serve clients, or build your team, you’re spending your time on below-the-line activities that do nothing but distract you from becoming a successful advisor. Here are five common examples.
BELOW-THE-LINE ACTIVITIES
1. Overeducating Yourself: Some advisors think their job is to know everything about insurance, investments, and financial planning. Instead of harnessing the knowledge of experts who can best serve their clients, they spend all their time becoming educated in those areas.
2. Reading Financial Pornography: Watching 24-hour news reports, reading financial newspapers and magazines, tracking the prices of oil and gold, and trying to guess the impact that the next terrorist bombing will have on the market is a waste of time, yet advisors are consumed with that kind of stuff. Your clients really want you to help them achieve their goals—and for the record, beating the market is not a goal.
3. Hanging Around with the Wrong People: If you’re hanging out with people who have average businesses with average client satisfaction and average productivity, then chances are your business will be a lot like that, too. Don’t confuse consensus with wisdom. Just because most of the financial services industry is living below the line doesn’t mean it’s the right place to be. As Jim Rohn says, you can do anything you want. You’re not a tree. Move! Be where you want to be, and do what you want to do. How can you tell whether you’re hanging out with people who are living below the line?
4. Failing to Delegate: Trying to do everything yourself is the last and probably worst example of below-the-line activity.
No one wants to see their businesses sink. To keep your head above water, remember this simple metaphor and spend your time above the line. Focus on the three activities that really matter—acquiring clients, serving clients, and building your team—and don’t get drowned in a sea of distractions.
