Today’s trends are pushing financial firms of all sizes to become larger and larger typically through acquisitions. When this takes place, advisors find themselves managing and maintaining an ever-increasing number of client relationships. This is profitable for the financial firm (and its owners) if the right systems are in place, a strong leadership team is present, and there are enough live people (not robots) to listen and solve client’s investment needs. I do wonder how this feels from the client’s perspective. Ideally, the advisor you have worked with stays with the new firm so there is continuity in your approach. Overtime though, you may become one client among hundreds, how does this impact your ability to get the most from a financial relationship?
To answer that question you must ask yourself, what’s most important to you in a relationship with a financial professional? Is the relationship based on performance, beating a benchmark, trends, or transacting your way to a larger account balance? When I started as a financial professional two and half decades ago, the above were reasons to hire an advisor. Much has changed (mostly for the good) over the years as information that was once guarded by large institutional firms is now available online. Add to this the positive impact technology has played in buying and selling investments including lower transaction costs, all good things for the investor.
Financial planning and the action steps of creating a plan are becoming more mainstream with a wide spectrum of investors. Regardless of your wealth, all investors may benefit by clarifying their goals, thinking of all possibilities, and then prioritizing next steps to get it done. Plans may be created and managed by the investor themselves or by a hired professional. As I see it, it’s a Certified Financial Planner that’s most valuable and may keep you focused, accountable, and avoid reacting when the sky is dark. Looking back on last year, it was the client’s financial plan rooted in long term goals with ongoing communication with a planner, that allowed them to stay focused and avoid blowing up their portfolio.
A good financial plan begins by outlining your goals and what you want to accomplish around a stated timeline. Then you may assign a job description to each account and stage its first use among the other available accounts. Goals first, money second, most have this backwards and think it’s all about the dollars, it’s not. In addition to investments, cash reserves play a large part in both peace of mind and short-term purchases. Mixing the right amount of liquidity and investments is part of planning. This allows you to continuously act on your plan as opposed to reacting to today’s market event.
Managing a portfolio, by yourself or with the help of an advisor, with no plan present may create problems when difficulties arise. How do you gauge how you and your monies are doing without a link to larger goals and purpose? Are you getting closer to what you want, or must portfolio changes be made?
Our firm was created to answer these questions and demystify the financial planning process. As we’ve grown and our work evolves, we see affirmation in serving a niche clientele by making planning more engaging and less stressful. How do we do this? In two steps, first by creating relationships and then allowing clients to self-select themselves so we may continue the relationship together.
Creating a relationship is open and available to all regardless of assets, income, and geography. Clients are able share their goals and aspirations so a customized financial plan may take shape. All plans are delivered for a flat cost and are outlined by a signed engagement letter. This describes the work, responsibilities, and duration while managing everyone’s expectations. Technology continues to streamline this process as its common for engagements to begin and end within five weeks or so. The outcome is that clients now have a plan, designed around their priorities, that they may manage themselves. This process in creating a relationship is built around advice, trust, and attempts to remove conflicts of interest so all efforts may be directed on the end result, a financial plan for the client.
There is a group of clients who recognize the value of their time and who choose to create an ongoing relationship together. Continuing the relationship with our firm is the second step and allows a limited number of clients to open accounts and transfer assets after their plan has been created. In exchange for this, an annual plan review in the spring and a fall review check in is offered. Combine this with quarterly newsletters and our ongoing strategy and advice around various life and financial decisions rounds out our value proposition.
We recognize we won’t be able to serve everyone, nor will everyone embrace our approach in continuing the relationship. That’s ok and why we offer creating a relationship as the first step in our planning process. This allows clients to get to know us from a “test drive” and illustrates what working with a financial planner may offer. It’s always up to the client to choose to continue the relationship together by joining our financial ark. One day the doors will shut on the ark, and we will sail, we can’t take everyone as space is limited. For those who do come aboard, it’s our goal to deliver clear communications, expand trust, and create sustainability with regards to their retirement goals and legacy.
From the beginning, we’ve been a firm that is purposeful in quantifying what “enough clients” means to us. Just as we ask clients to define enough in their financial plans, we’ve taken the same medicine to quantify the total households we may serve. The chase for more will always be there, but perhaps knowing exactly who you are, what you may offer, and who you desire to serve may lead to a better planning experience? We think it does as time will tell. If you’d like to learn more or chat, please reach out.