I know it’s a broken record this idea of listening more attentively, but I want to put another spin on it. I believe there is a chain of events that prevents advisers delivering life-changing advice on a regular basis. It goes like this:
- Don’t ask great questions (e.g. from the gurus like Kinder, Sullivan, Bachrach, Nemeth) – missed opportunity. (Fail)
- Don’t listen to the answers at all – too focused on what you expect to hear or want to hear to suit your own ends. (Fail)
- Hear the answers but don’t appreciate their importance – because they seem too ordinary, or too far away in the future. (Fail)
- Hear the answers, appreciate their importance but don’t do anything about it. (Fail)
Let me give you an example:
An adviser I worked with recently tried some new power questions for the first time on one of his retired clients and funnily enough the client answered without any scary moments for the adviser. He noted the answers, which were pretty mundane things like:
- Take a nice trip abroad
- Gift some money to the children
- Go and do a course at University
However, when we de-briefed he wasn’t sure anything great had come from the questioning. This was a point 3 fail as noted above. “Heard the answers but didn’t appreciate their importance.”
Once we had established that for this client these issues were the important issues, the question was what to do next.
The solution was pretty straightforward. Build a cashflow model that ‘showed’ the client he could do the things he wanted to do, now. Not in 3 years, or 5 years, which is what the client was talking about; but now. Today. Yesterday even.
If you are already doing this type of work this is going to seem blindingly obvious, yet in my experience many advisers are not making these connections and not taking the opportunity to add maximum value and change someone’s life for the better.
Telling the client they can do these things is not the same as showing, or proving to the client they can do them and everything will still be ok.
Another pushback about step 4 (i.e. doing something about the issues) is “What’s in it for me?” Advisers are worrying that this is more work and can’t see a product sale or a ‘get paid’ opportunity in it. I think this is very short sighted. By doing the best possible job for the client here is what could happen:
- You could dramatically change the closeness of the relationship with the client and their perception of your value
- You could make the relationship even stickier than it currently is (important in this post RDR world where your ongoing income can be turned off by the client)
- You could increase your ongoing fees
- You could generate more referrals from your existing clients
- You could find that the client has more investable assets that they haven’t revealed previously (or that they allow you to manage some assets that were previously at arms length)
Any or all of these outcomes would justify the work in my view.