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The Third Element

The first and second elements describe what you do.

The third element describes how you do it.

Outline below the major steps of your wealth management process:

How did you describe the first step of your process?

“I analyze my client’s situation.” “I ask a lot of questions.” “I deconstruct my client’s portfolio.” “I conduct a thorough risk posture assessment.” “I assess my client’s financial and tax status, their time horizon, and their investment objectives.” “I develop a financial action plan for my clients.”

Compare these responses and yours to: “I listen to my clients.”

Listening, which is explored in depth in the next chapter, is a critical communication skill for financial professionals to master. When you listen to your clients, you learn. When your clients speak you gain an understanding that’s impossible to attain when you’re speaking.

Consider how clients will feel when they learn about how your process starts:

  • Statement I—“First, I’ll ask you to provide detailed financial information and then I’ll ask you a lot of questions about your financial affairs.”
  • Statement II—“My process starts by listening to you.”

Clients have been conditioned their entire lives to be spoken to. To be pitched. Turn the table. Give your clients what they yearn for: Respect, evidenced by your sincere and earnest desire to listen to them and to learn from them. Stop being so data-driven. You’ll get the data you need in due course. Make it clear instead that you’re interested in their story, not just their statements, documents, and policies. The experience will be much deeper and richer for both of you. And then you can go on and analyze the data they’ll willingly share with you to your heart’s content.

Which takes us to the next step in the process: the “go-to-work” phase. It’s often cited as the “analysis” phase, but only rarely do financial professionals offer clients more than a glimpse of all the effort and thought that goes into this stage of the process. Why don’t you let your clients know that with the information they share with you, you roll up your sleeves and go to work? You study and analyze the information. You consider various ways to address the client’s issues and objectives, and you test and model those solutions until you arrive at a solution or set of solutions designed specifically for the client.

Consider how clients will feel when they learn:

  • Statement I—“I’ll deconstruct the information we receive and identify any gaps or deficiencies in your plan that should be addressed.”
  • Statement II—“Then I will go to work. With the information you’ve shared with me, I’ll study and analyze it; I’ll develop, model, and test various ways to meet your objectives; always seeking solutions customized to your needs.”

After that point it’s time to explain the third step in your process—the recommendations, advice, and solutions you have developed for your client—in plain, simple English. No technical jargon. And when you and your client reach agreement, you will implement those solutions in an independent, objective, and unbiased manner, always considering the importance of controlling costs and expenses.

Presentation skills are examined in later chapters. For now, just remember this: Clients don’t want to be talked down to, and they don’t want to be baffled by financial verbosity. They want straight talk they can understand. Let them know that’s what they’ll get from you.

They also want something else—to know that you’re on their side, that you’re looking out for their best interests. Let them know that you’re an independent thinker who they can rely on for objective and unbiased advice. And that your compensation will be fair and reasonable in exchange for the services and products that you provide and that you are always considering ways to control their costs and expenses.

Consider how clients will react when they are told:

  • Statement I—“We’ll then implement the plan.”
  • Statement II—“We will explain our findings and present our recommendations to you in plain, simple English, no technical jargon, and when we reach agreement and put our recommendations into effect, we will do so in an independent, objective, and unbiased manner, always mindful of controlling costs and expenses.”

The final step in your process is monitoring, evaluating, and adjusting the solutions that have been set in motion. But a word of caution: Never refer to this fourth step, as so many financial professionals do, as “the most important step.” All the steps of the process are important, and weakness in any of the links undermines them all.

On an ongoing basis, you will monitor and evaluate the progress of the client’s wealth management plans and make adjustments as necessary. You’ll also make adjustments, as appropriate, as market conditions change, as tax laws and regulations are amended, and, of course, as changes occur in the lives of your clients and their families.

Consider how clients will react to the final step of your process:

  • Statement I—“We’ll tweak your plans as conditions warrant.”
  • Statement II—“We will then monitor, evaluate, and adjust. We’ll monitor and evaluate the plans that have been put in place to make sure they’re meeting expectations, and, if they’re not, we’ll take appropriate action. And we’ll make adjustments to your plans as material changes in the markets warrant, as changes occur in tax laws and regulations, and as changes inevitably occur in your life and the lives of your family.”

To summarize your process—the third element of your value proposition:

Figure 1.1

Figure 1.1. Core wealth management process.

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