Back to Index COACHING CORNER You can allow external circumstances to define you or you can define yourself based on your goals and values. Which approach do you think will serve you better? Which way of thinking do you hope your children or grandchildren adopt as an "operating system" for their lives? Absent hanging chads or some other voting irregularity, by the time you read this column you'll know who our new President is. As I'm writing this on November 4th, I don't know that outcome. While there are some people whose quality of life may depend on who the President is, does it really matter to you... personally or professionally? Frankly, I doubt that it does. For example, while I generally agree that lower taxes (for everyone) are good for the economy, I don't plan to lower my goals or change my plans for the future if my taxes go up. Just as I wouldn't lower my goals if any of the other expenses inherent in operating a business were to increase. I love being a business owner and I'd much rather be in the group being targeted to pay more tax than any of the other groups. As a committed business person and someone who is dedicated to high achievement, I find it insulting when some business people claim that if one person or the other is elected President it will change how they run their business. I find myself yelling at the TV screen, "You're not one of us!" A real entrepreneur figures out a way to achieve their goals regardless of circumstances outside their control. Maybe it's just election propaganda, but it pisses me off. I don't like the idea of being lumped into a group of whiners who would blame anything other than their own choices for failure. What about you? "We can let external circumstances define us or we can define ourselves based on our goals and our values." - Bill Bachrach Is this really a great time to grow your business? Is now a great opportunity for financial professionals to build their businesses or is thinking that it is just a mind game we play with ourselves to help us get through difficult times? On October 3rd the Wall Street Journal ran an article citing research from Prince & Associates that 81% of investors with over $1M are so dissatisfied with their advisor that they plan to take money away from that advisor or change advisors completely. 86% of those surveyed are actively telling their friends to avoid their advisor. I suspect this may be true for people with less than $1M to invest as well. Why is that? I believe it's due to having an investment-based relationship. While stock brokers may have evolved from selling stocks and bonds to being "wealth managers" and asset-gatherers, the fundamental promise or implication of that relationship with their Clients is that they will either beat the market or hire money managers who will. In the investment-based relationship the benchmark is the S&P 500, the DJIA, etc. In a Values-Based relationship what are the benchmarks? They are the Client's goals and the associated values-fulfillment that comes from achieving their goals. Clearly the investment-based relationship is very risky. It's risky for the advisor and the Client. The risk for the Client is the false-impression that somehow someone has special access to information or knowledge that will out-perform the market benchmarks, no matter what. Since we all know that there is no such information or knowledge, the investment-based advisor is risking their entire business on events not within their control. The wealth manager or asset gatherer is not much more immune to "book re-building" than the old-school, position-building stock broker. When the inevitable pendulum swing from bull to bear happens the advisor loses Clients and the Clients lose leadership. Proving once again how imprudent it is to base your business on what's completely out of your control. One could argue that Clients are in greater need of advice during challenging times. In the investment-based relationship what happens when the market goes down? Stress and pressure. Why? Because the question the Client wants to know is, "why didn't you see this coming and get me out?" Or "Why didn't you see this coming and move me out of the securities that would be hard hit and into the securities that would thrive?" The joke among advisors is, "if I knew that then I wouldn't need Clients!" True, but your Clients didn't come to have the expectation that you could predict markets all by themselves. What happens to the Values-Based relationship when the market declines substantially? The relationship strengthens because the Clients are relying on the advisor to help them navigate the current situation so they still achieve their goals and fulfill their values. When the situation is bad you naturally rely on your most trusted advisors even more. They rely on their Trusted Advisor for advice about how to adjust their behavior and their goals to respond to whatever the situation is. "What's my new time horizon?" "Should I continue to fund my goals or try to time the bottom?" "What if I have to go back to work?" "What decisions should be delayed or altered?" "How does this affect my taxes, my estate planning, and / or my insurance?" "What about my real estate loans?" You can't control what happens in the market, the economy, and the world, but you can adjust your plan and your actions accordingly. In short, they expect leadership. And it's not just about their investments. It's about their finances. They need help making smart choices about their money, not just their portfolio. There's a reason why compliance forces you to diligently communicate that there are no guarantees: because there are no guarantees. This is interesting lesson about using the Ibottson chart as a sales tool. If you're still pretty much just an investment advisor, this could be an ideal time to upgrade to being a full-service financial planner. So, here's why I believe this is a great opportunity for you to add Ideal Clients. The bubble's been burst. Not the real estate bubble, but the myth that anyone can consistently or accurately predict market or economic events. As crazy as it seems, too much of the general public still wants to believe there's silver bullet. This creates a better environment for people to hear the truth. And the truth is that YOU NEED A PLAN and someone you trust to tell the truth and hold you accountable to the actions your goals and values require. Here's some armchair psychology. When something is out of our control and we feel out of control, we tend to gather information. Having more and more information gives us the illusion of control. But that's all it is - an illusion. When you have lots of information you may feel better, but you're not actually any better, as measured by the results you want to achieve. The gathering of information has not moved you toward your goals or produced any result. Too much information creates confusion and people who are confused freeze. What you actually need is advice about what action to take. This is what will help things actually be better. Because there are lots of people seeking information it's easier to connect with them. When you connect with them they are likely to be information weary and more receptive to someone who can provide clear, reasonable advice. That’s leadership. Really, it's a great time to be a financial planner. Next month we'll discuss the not-so-secret "weapons" for financial advisors who choose to be successful in all economic environments. Keep moving forward, Bill Bachrach Founder & Chairman Back to Index

The Trusted Financial Advisor (tm) ISSN 1543-432X A monthly publication dedicated to helping transform the financial services industry from salespeople to Trusted Advisors. Bachrach and Associates, Inc. baivbfp.com info@bachrachvbs.com 8380 Miramar Mall Suite 200 San Diego, CA 92121 800-347-3707 Printing Tip: For best results print this newsletter in landscape mode. (c) 2008 Bachrach & Associates, Inc. All rights reserved. The following are registered and trademarked and intellectual property of Bachrach & Associates, Inc.: Financial Road Map®, Success Road Map®, Values-Based Selling®, Values-Based Selling® Academy, Values-Based Selling® Academy 2, Trusted Advisor Coach®, Values-Based Financial Planning™, Being Done™, Values-Based Financial Professional™, The Values Conversation™, High-Trust Leadership™ and The Quality of Life Enhancer™. All rights reserved.