Own your clients’ debt

75% of our best clients have debt and it doesn’t have to be this way but our clients need us to change. I was at an industry event sometime ago where the presenters spoke about how many trillions of dollars was out there in baby boomer assets. These assets were sitting on the sidelines or mostly held by retail banks and represented a great opportunity for independent advisors.

As I watched the excited expressions of my colleagues, I grew frustrated. There was talk about cultivating and growing our practices but what they were really talking about was hunting: going out and finding new clients harboring all those assets. Time to go and find these new shiny clients who were just oozing with assets we could manage.

Recently CIBC released a study reporting that 75% of boomers have debt. Yup, that’s right. That juicy segment of the population, those shiny ones oozing those trillions of dollars, the ones who hold most of the wealth and 75% of them are in debt.

Nearly 50% of the boomers in the study stated their debt was hurting their efforts to prepare for retirement. What about those who felt they were making progress with their debt? Do you think those people would have found value in an advisor who could help pay their debt down faster wasting fewer dollars on interest? Do you think that any of those 75% of boomers carrying debt would welcome the chance to save interest dollars and get rid of their balances? Are there any boomers you think wouldn’t see value in this? What if you could offer that value? Would you see value in that?

If you agree, then why don’t you start taking steps to do something about it? Be the change we need to see in the industry. Why not? What have you got to lose by helping clients more?

I’ve spent a lot of my time over these last few years creating resources and most of them are free. I’ve written over a hundred blog posts, more than thirty articles and contributed to many more, created video blog, pod casts and I have even written two books about the issue – those are not free but I do give them away sometimes and they are inexpensive.

For free there are literally hundreds of ways you could make a start. So, what is holding you back? What do you think including debt management as part of your services would be like? Do you imagine it to be difficult? Will it be too much work? Will it hurt? Are you worried you won’t seem as smart or as professional? Do you think your clients are doing the best they can and nothing you could learn would change anything?

If those are your fears let me reassure you. You are right! If you think that all those are reasons not to talk to clients about debt, then you’re correct but you are only right because of your attitude about debt, what you think of people who carry it and how hard you feel it might be to make change. That is what will make all of your fears come true.

With that in mind, think back to your early years, as a wet behind the ears advisors. Let’s use selling insurance for our example. When you were new did you have doubts? Back then did you imagine selling life insurance to be difficult? Did you think selling life insurance be too much work? Were you afraid selling life would insurance hurt (even if only your ego)? Were you worried you wouldn’t seem as smart or as professional if you sold life insurance?

You get my point. When contemplating trying something new, it’s not the new thing that necessarily freaks us out, it’s the newness. The anxiety, the discomfort, Seth Godin would call that feeling the lizard brain speaking up and trying to take over. But doesn’t the best stuff you ever did freak you out before you do it…if you are really honest with yourself?

75% of baby boomers need you to do things differently. They need you to stand being afraid long enough to learn something new. They need you to talk back to your lizard brain, set your ego aside and invest some time, some money and whatever it takes to make change.

When advisors hear me talk about working with the other side of the balance sheet they think I mean the basics, a budget, no lattes, stop eating out, don’t put stuff on your credit card, get the lowest rate on your mortgage, double up your mortgage payments etc. The thing is, most people technically know all that and I wouldn’t waste your precious time regurgitating social econobabble to you.

Let me be clear, when I say advisors need to learn to include debt and cash-flow management in to their practice. I am NOT talking about the basics. I am NOT talking about budgeting. I am NOT even really talking about the math, although you need that too (you just don’t need me to help).

I am NOT talking about telling clients what they can’t have. I am NOT talking about advisors being responsible for the results of their clients’ behaviour. I am NOT talking about offering your time those who are in major debt trouble (likely needing one other types of debt pros that at least exist). I am NOT talking about a service that attracts people who do not fit your client profile. I am NOT talking about an exercise in frustration by trying to get clients to do things they can’t stick to. And I am certainly NOT talking about a value added service that looks more like volunteer work and costs you, rather than makes you money.

What I AM talking about is adding a layer to your current methods, taking into account the part of the client that is running the show (which is their lizard brain incidentally) by addressing their financial behavior. Debt and spending are heavily influenced by behavior and emotion. The good news is it can be changed by managing behaviors. The bad news is this more emotional part of finance doesn’t care about math. So, if we apply so much of what we’ve learned about financial planning in a mathematical nature to help a client manage debt and spending it almost never works. Even if it does work, it’s a ton of hand holding, re-jigging figures, and often results in the client giving up or never even committing in the first place. That way of doing things is a total waste of time.

Clients need a clear and simple structure, one active goal to focus on that they can feel and see the results of quickly and regularly. They need a debt structure that can be automated leaving little opportunity for them to get in their own way. They need queues to keep them focused and resources they can access which they can use on their own when needed. They need to see the financial power they already have and what happens when they channel it. Clients can do it, and you can help. I’ve created or working on every resource you need to do this without adding hours to your process.

Help me, help you and let’s change this 75% of boomers in debt business! Cultivating the clients you already have will draw more just like them to you. You don’t have to hunt anyone. You can do it. I can help!