During the past year and a half (and counting), I don’t know anyone whose life hasn’t been impacted by the COVID-19 pandemic.
As a result, many of us have experienced epiphanies and made positive changes to our lives. While not dismissing the terrible toll the pandemic has taken on many of us, I think it’s helpful to recognize the good things that have occurred. I have seen many people rediscover the importance of family and friends and focus on what really matters in their lives. It’s not coincidental that the underlying philosophy of Return on Life—living the best life possible with the resources you have—has become a mantra for many of us.
According to a recent Consumer Reports’ survey, “59 percent of Americans say they want to spend more time with family. And 44 percent said they enjoyed spending more time at home during the pandemic and hope that continues afterward. “The survey found that more than a third of us want to try something new.”
I’m betting at least some of your clients have been looking at AUM in a new way as well:
A: Aligning means with meaning
U: Understanding what makes them unique (and what they really want out of life)
M: Monitoring life changes and transitions they are experiencing both now and moving forward
When you refer to clients as a number (as in “my $6 million client”) it’s a guaranteed way to alienate them. No one wants to feel they are simply a means to an end.
Don’t ever forget that your clients are not all one-of-a-kind. They want you to look—and treat—them as unique individuals, instead of simply an “asset under management.” Numbers may impress your advisor friends, and maybe even some clients, but that approach will surely catch up with you, especially when it comes to younger investors who are your future. Return on investment is important—even critical—but it’s not the be-all it once was.
According to a dozen experts interviewed by AARP, the pandemic has changed us in the following ways:
- We appreciate family more than ever;
- We need to be financially prepared for whatever the next crisis might be;
- Paying attention to our health is essential;
- Remote work is here to stay in some way, shape or form; and
- Expect the unexpected.
There are more; I’ve focused on the ones I believe most impact the relationship between you and your clients.
How do we move forward?
It’s not rocket science! Instead of focusing on asking, “How much do you have?” or “How much do you want to have?”, develop a financial lifeline for your client, whereby you discuss all the life transitions they expect to happen (i.e. children leaving home, changing jobs, etc.).
Mapping out each client’s lifeline over the next two decades allows you to engage more closely with them around key life stages, and plan accordingly. Your value proposition to them immediately goes up because you are not only thinking about one number (i.e., retirement) but also everything that comes before—and after. They may find that they can take that family trip sooner than they thought because you helped them understand how planning involves more than number crunching. They’ll thank you by referring their friends and family to you.
It’s really a no-brainer, if you ask me. After everything we have all been through, you have the opportunity to empathize with clients and help them move forward. Stop focusing on what’s going on in the markets, timing, and outperforming last year’s (or even last quarter’s) returns. If one of your clients doesn’t agree with your approach, it’s probably time to part ways. I have seen time and again that advisors who focus holistically and long-term enjoy a more fulfilling and prosperous career, usually with fewer clients.
When it comes to the bottom line for your clients, it’s not just a number. it’s not about how much they have as much as it is about having enough.
In Life Centered Financial Planning, the book I coauthored with Paul Armson, we introduce readers to our “Return on Life™ (ROL) Manifesto.” This is a tool you can share with your clients to let them know you understand that priorities change, and that financial planning is so much more than a one-and-done event:
- Money is simply a tool.
- Comparative measures are neither helpful nor necessary in making progress.
- Progress must be personalized.
- The primary measure of success is Return on Life (ROL).
- How I am compensated is a matter of absolute transparency.
- I can provide quality and value to a limited number of clients.
- We are stewards of wealth, not owners.
- The greatest value I can bring to my clients is to bridge their means with their meaning.
- I will not entrust my clients’ well-being to anyone who does not put my clients’ interests ahead of their own.
- An ROL advisor has a calling, not a job.
As things continue to return to “normal,” it’s a great time to remind your clients that you’re there to help them focus on their priorities and reach their goals—and that you’re more than a money manager. You’re their fiscal philosopher, there to deliver reality checks and help them plan so that they can live the best life possible with the money they have. After all, if this pandemic has taught us anything, it’s that we need to appreciate what we have and plan for the future…while taking full advantage of the present.