Originally posted at thinkadvisor.com by Jane Wollman Rusoff, January 27, 2023.
How to hit it off with clients right from the get-go? Ask about their personal history.
“Arrange the conversation to connect with people instead of connecting with their money. It starts with the idea that your client is a human being, not an account,” Mitch Anthony, president of Advisor Insights, tells ThinkAdvisor in an interview.
With his life-centered financial planning approach, the popular keynote speaker trains advisors to hold a wide-ranging conversation with clients about retirement that, he says, “starts with lifestyle and then moves to money.”
Financial advisors need to focus on the client’s “end objective” for saving and investing that money, Anthony points out.
Kicking off the conversation by asking, “What are your goals?” often triggers a “deer-in-the-headlights look” from clients, the industry veteran notes in the interview.
“Start the conversation with something concrete, like their personal history,” he highly recommends.
Anthony co-founded, with Steve Sanduski, ROL (Return on Life) Advisor, an online platform designed to help advisors become life-centered planning firms.
Anthony is also founder of the Retirement Coaching Program, and in conjunction with Texas Tech University, developed a certificate program in life-centered financial planning.
As the author of “Life-Centered Financial Planning” (2017) and the classic “The New Retirementality,” among several other books, Anthony teaches advisors to help clients “map out all their life events they anticipate for the next 10 to 15 years,” so they’ll be financially prepared for them, he emphasizes.
In the interview, he reveals the six categories of life events that advisors should cover with clients. According to his research, there are more than 60 separate life events that occur over a lifetime.
It’s essential to stay in touch with clients regularly to keep abreast of changes and transitions in their lives, argues Anthony, whose clients include Charles Schwab, Citigroup, Edward Jones, Goldman Sachs, Merrill Lynch, UBS and XY Planning Network.
Prior to building a career training financial advisors, Anthony developed life skills education programs — on, for example, conflict management — for secondary schools.
ThinkAdvisor recently held a phone interview with Anthony. The host of the long-running syndicated radio show “The Daily Dose” was speaking from his base in Rochester, Minnesota.
“The way to approach this business,” he maintains, “is to become more human-centered, a better biographer of your clients and to provide value that will never be undervalued.”
Here are excerpts from our interview:
THINKADVISOR: What should advisors ask clients at their first meeting?
MITCH ANTHONY: Learn about the client and find out who they’re dealing with, where they stand and where they’d like to go.
You should start the conversation with something that’s concrete, like their personal history.
Should the financial advisor ask about goals?
I think the industry at large has it backwards: They want to sit down with clients and talk about their goals. But why do you want to start the conversation with the ethereal and with blue sky [dreams]?
A lot of the time, clients give you a deer-in-the-headlines look when you ask them what their goals are.
What’s a better way, then?
Arrange the conversation to actually connect with people instead of connecting with their money.
It starts from the idea that your client is a human being, not an account.
What’s the concept of your book, “The New Retirementality: Planning Your Life and Living Your Dreams … at Any Age You Want”?
I’m [addressing] financial advisors whose entire business revolves around the proposition of retirement, but I’m telling them that that’s an outdated idea!
Why do you believe that?
Retirement is a social construct that has outlived its use. It was invented in the industrial age for industrial age purposes. And it no longer applies.
We’re now trading intellectual capital and experiential capital. Those things appreciate with maturity, not decrease.
So the whole idea that when you reach 65, you’re supposed to take the exit is an artificial finish line that’s been superimposed on our lives.
People I know who retired fairly young fell ill not many years later, and some have died. I wonder if that’s because they had nothing much to do. Thoughts?
When many people retire, they miss certain aspects of the work they did; they feel this void, this aimlessness and lack of purpose in their life.
A gerontological researcher at the Mayo Clinic told me that people [often] go from boredom to pessimism.
Once they get to pessimism, it’s a downward spiral both physiologically and psychologically.
The industry at large has sold people on the idea that if you have enough money, everything is going to be great. No, it’s not. You’ve got to have something to do that matters, or you’ll feel useless.
In working with advisors, what’s your specific approach concerning retirement?
I’m teaching them how to have a broader conversation around retirement, one that starts with lifestyle and then moves to money.
That’s what you call lifestyle-centered financial planning. Right? Please elaborate.
It’s understanding that there’s a context for the money we’re working with — instead of just talking about money, where we invest it, what it might return, how we might distribute it and what sort of investment vehicles we can use.
There’s intentionality behind saving and investing. I challenge advisors: “What’s the one question that needs to be asked and rarely ever gets asked?” It’s “What’s your money for — the end objective?”
The end objective for all money is to help move our lives forward. That’s what I mean by life-centered financial planning.
Let’s learn things about the client’s life and how they’re going to use this money going forward.
How does that differ from the way advisors typically do financial planning?
The industry would like to pretend that there are only three life events: kids going to college, retirement and death — because all their products are skewed to those events.
We’ve done research and discovered over 60 life events from cradle to grave. Not everyone navigates through all 60, but people do [move] through many layers and many transitions in life.
They need to be financially prepared for those events as much as they can be.
How can advisors help with that?
It’s a matter of anticipating the future and having a plan in place. Most advisors are jumping to Point 2 without understanding Point 1.
Research shows that people spend more time planning a two-week vacation than a 30-year retirement.
So I’ve created a dialogue for advisors and their clients to help clients think through what could be ahead and that decision of jumping off the retirement cliff.
Tell me more about what you cover in your retirement coaching program.
There needs to be a two-part conversation about retirement: “What are you planning for your time?” and “How are you going to pay for it?”
I’m teaching advisors how to stay in touch with what’s happening in their clients’ lives. Life transitions are a big deal.
Especially with regard to finances, I presume?
Money goes in motion when life goes into transition. The life event is what causes the money to move away from you or toward you.
So should advisors keep checking with clients to ask, “Is anything new happening?”
Yes. I’ve created discovery tools to help them do that. We teach advisors to sit down with a client and map out all the events they anticipate in the next 10 to 15 years.
We have six categories of life events: family, health, work and career, financial, retirement, and giving events.
The client learns that if a change is coming in their life, they need to let their advisor know.
What if a significant event occurs out of the blue?
I teach advisors to say to clients: “If something changes between now and the next time we meet, let me know because you need to tell me anything that’s going to impact your money.”
Advisors keep having the same old “Groundhog Day” conversation, revisiting the same stuff over and over.
Why would you waste your time in front of a client revisiting the statement that you sent them in the mail, when you could be catching up on what’s going on in their life and anything that’s happening that could impact their wealth-building process going forward?
What are the benefits to advisors who use your approach?
The chief benefit is that the relationship is solidified, and the client isn’t going to go shopping for another advisor.
Advisors need to get the client’s story. Once that happens, empathy enters the picture. Relationships are the result of the exchange of story.
Why is empathy important?
It’s everything. My definition of empathy is, “When I know that you ‘get’ me.”
Every human being has the need to be understood, but not every financial services client feels understood by their advisor.
At the end of the day, it’s about that relationship. Just helping people grow their nest egg is one thing. But helping people achieve what they want in life is another matter. There’s a higher purpose to this whole trade.