1 thing advisors shouldn’t do—and plenty of things they should

Are you trying to gain clients with your smarts? If so, Darren Coleman has a message for you: stop it.

Coleman, senior vice-president and portfolio manager at Coleman Wealth, Raymond James in Toronto, was part of a panel discussing client service at the Advisor’s Edge 20^th anniversary event earlier this week.

Specifically, Coleman was referring to advisors competing for business based on returns or stock picking. “This is all nonsense,” he said, “so let’s all stop it.”

Instead, he issued a challenge to advisors: “Try and land your next five clients based on promising them a return of, maybe, 4%.”

Instead of focusing on returns, advisors should focus on being better, said Coleman—at conversations, goal-setting, planning and service.

“Find other factors that are sustainable,” he said; otherwise, you’re renting your clients, because they’ll leave you for the next advisor offering big returns.

Coleman launched another call to action for advisors: work harder and triple your targets.

“So many clients need our help,” he said. “Find a way to talk to more people [and] share more of what you do. […] Do more good.”

Speaking on the same panel, Cynthia Kett, principal at Stewart & Kett Financial Advisors in Toronto, offered an additional challenge: stretch your limits as a professional. “That’s when growth happens,” she said.

But don’t simply take every opportunity that comes your way; rather, choose ones that advance your professional goals. And if you feel unqualified or scared to embrace an opportunity, identify your transferrable skills or seek support, she said.

The take-away of the third panellist, Phillip Ackers, principal at Lakeshore Performance in Toronto, was to “leverage technology all day long,” so that you don’t waste energy on things that can be automated.

Read: How advisors can benefit from AI

Also, he said, “With clarity, understand who your ideal client is.” If you need help identifying that client, Ackers suggested creating a focus group to identify what current clients value about your practice, or asking clients during annual reviews.

Advisor, coach thyself

When panellists were asked what professional mistakes they’ve made, Coleman confessed to showing off his financial savvy in his early days, until a colleague told him that client conversations are about clients, not about him. “It hurt like crazy at the time,” said Coleman of that conversation.

He learned, however, that clients want clarity, wisdom and partnership—not information. “Information’s everywhere,” he said.

To deliver these things, advisors must create a unique environment for clients, letting them talk about goals, desires and fears—conversations clients likely won’t have with anyone else. “It’s going to be very emotional, so you have to be brave enough to be part of that without getting drawn in,” said Coleman.

In contrast, Kett said she was initially challenged to talk more during client conversations. “I didn’t have enough confidence in my abilities,” she said, adding that she’s pleased the industry now has more women and visible minorities.

She recalled a time when a successful, older male client challenged her tax-efficient planning. “I just saved you tens of thousands of dollars […], and that’s not impressive?” she thought, conceding to herself that perhaps the client-advisor fit was wrong.

Unbeknownst to Kett, however, the man’s quieter spouse was impressed.

“She appreciated […] that I could be that middle ground between them, and they came back,” Kett said.

The anecdote effectively illustrated advisor value and the importance of engaging both spouses—a point that was highlighted on other occasions during the event, along with the future financial force of women and millennial investors.

Build on the numbers

When panellists were asked how they connect performance figures with clients’ life goals, Kett said she asks clients about their motivations, because knowing they can afford to fulfil their goals is more meaningful than numbers.

Coleman agreed, adding that the challenge is that certain clients get hung up on numbers. “Sometimes they want information and they don’t even know what to do with it,” he said. Getting to their “why” requires an emotional, rather than technical, conversation, he said.

Ackers noted that, with quarterly reporting and online access, the industry itself perpetuates performance numbers. “Everything is tied to that short term, and therefore that becomes the gauge,” he said, adding that if advisors don’t have client conversations about life goals, the short-term numbers are all a client has.

Similarly, keeping clients on track with behaviours for financial success could require a deeper dive by advisors.

For example, Coleman discovered through conversation that a client was overspending via The Shopping Channel because she was lonely. The solution wasn’t money management—it was finding fulfilment through personal connection, he said, in this case volunteer work. Coleman only came to this solution by asking uncomfortable questions.

Panellists also stressed the importance of taking the lead as a professional.

For example, when delivering bad news, be forthright about the size of the loss or situation, as well as about potential choices for moving forward, said Kett.

Coleman added that clients need context, such as whether a loss is the result of a mistake or a global phenomenon. Further, advisors should do lifeboat drills with clients, he suggested, meaning clients need continual reminders that bad things will happen.

For example, Coleman asks clients how they’ll react when they lose 30% of their portfolio. “We’ve picked up clients by having that dialogue,” he said, “because their other advisors never told them this was possible.”

During the Q&A, an audience member asked whether clients care about CRM2 reporting, which led to a conversation about conveying to clients the value of advisory services. Ackers turned the idea around, suggesting that if clients already feel valued, advisors won’t have to blow their own horns.

Said Acker: “If you make clients feel valued, it solves for the value discussion.”

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