Managing change

(September 2005) Competition’s increasing, and not just from other financial advisors. You’re also faced with losing business to a range of professional specialists, including accountants, lawyers and insurance professionals, who have incorporated investment advice into their practices.

According to a study of 579 Canadian financial advisors (see chart) nearly nine in 10 top advisors believe the future will bring even more intense competition. This view is shared by advisors across all income levels.

The kind of competitive environment wealthier advisors are forecasting demands you take a deep look at the fundamental ways you do business. Mere cosmetic improvements aren’t enough. In working with hundreds of advisors going through our firm’s coaching program, I’ve found nothing sets practices apart from the competition better than an effective wealth management process.

What is wealth management? It’s a process whereby an advisor takes care of affluent clients, their families and their businesses as part of a long-term, consultative relationship. It usually involves a diverse range of offerings according to the needs of each client, but may well include investment management, financial planning, retirement planning, estate planning, tax planning, asset protection and cash flow and debt management.

Many advisors have glommed onto the term “wealth managers.” But while they call themselves that, they often have little more than bare-bones conversations with clients in order to determine which products to sell them. True wealth management is built on an in-depth, consultative approach.

The shift to a consultative orientation for your practice won’t just hap-pen by itself. You need a clear, replicable process that makes sure you engage clients on every critical aspect of their financial lives. This process provides you with the information and insights you need to create the right solutions, and gives you ample opportunity to build client relationships.

I recommend you build your consultative wealth management process around a series of five client meetings: a discovery meeting, a wealth management plan meeting, a mutual commitment meeting, a 45-day follow-up meeting, and then regular progress meetings. Each meeting is designed with a specific outcome in mind, and each is critical to your efforts as a wealth manager. To arm you with the knowledge you need to begin to implement wealth management, columns in the coming months will go into detail on how to conduct each of these five meetings.

Copyright 2005, CEG Worldwide, LLC. All rights reserved. John Bowen is founder and CEO of CEG Worldwide, a U.S.-based global training, research and consulting firm.“The Bowen Report” appears monthly.

(09/12/05)