Many things I'm sure, but I want to focus on collaboration
How do we as advisors approach the value-add of our relationships? Some ways are quantifiable (tax planning & savings strategies, estate planning although that may be years away & not exact) while others not so quantifiable like offering financial peace of mind. How do we hone in on what it means to be in a collaborative relationship with our clients? Because at the end of the day our collaboration with clients is the main driver to a successful financial future.
This concept of collaboration as the value-add jumped out at me while reading “Atomic Habits” by James Clear. He uses a quote from Charles Darwin - “In the long history of humankind, those who learned to collaborate and improvised most effectively have prevailed.”
Two elements of this quote resonated most with me in our world of financial advice:
1) Collaborating with clients in a meaningful way is imperative to the success of the relationship, and many times to the long-term success of their financial goals. Two minds are usually better than one.
2) “Improvised most effectively” - isn’t this what we do with clients when building a financial plan? The plan itself is often a linear baseline meant to be a somewhat long-term measuring stick for progress of a clients financial life. We all know, and communicate, that this plan will deviate as time goes on. Having the plan in place allows us to improvise and prevail with whatever life throws at our clients.
Collaboration isn’t a new concept, yet it is a concept I’ve come to appreciate more and more as my career has progressed. I wish I could explain why, but I was never a great collaborator throughout school and early in my career. I was a hard-worker (good grades, college athlete), but I fell in the trap of relying on myself to make improvements. It took me until my 30’s to realize just how wrong I had been. Once I opened myself up to others, learned to gain wisdom and perspective, my growth as a leader and advisor changed tremendously.
Fortunately for me a switch eventually went off and it’s been a huge benefit for me. I’m sure we all have clients who feel the same way that I used to - harder to open up and collaborate with others. They hold things in and try to do it mostly on their own. But they’ve decided to engage with us, or are thinking about it, and that’s a key first step. Next is to build the trust to truly have a collaborative relationship to add value to their life when the opportunity arises.
One such client relationship resonates with me here. It was a younger client with a high level job at a large corporation. She was making great money and was able to provide well for her family and was enjoying life. An opportunity arose to join an upstart company, there were risks with the move, but it also presented upside potential if she was willing to make the jump. I remember having multiple conversations during this time just talking about the options. Some monetary and planning conversations arose, but it was mostly just talking about the opportunity and what it could mean for her family's future - both the pros and cons. Long-story short she decided to make the move, and the company she went to just had a large liquidation even as it was acquired by an outside firm. While she was on a great path before this new job, the current trajectory is even better. I can’t quantify how much my conversations with her had on the decision to change careers, but I know I was brought in as an objective outsider to collaborate during this major life moment.
To me, financial planning is all about improvising. This is what makes a financial plan so great, it gives you the ability to improvise quickly in an ever changing world. One such example was during the worst days of Covid, for investors this was March of 2020. I remember vividly being on the phone most days, helping clients make sense of what was going on around us. One of the best tools to make sense of it all was being able to pull up clients financial plans and assure them, again to the best of our ability at this time, that things would be fine - we’ve planned for worst case scenarios! Financial plans looks great on paper when its factoring a 5% or 6% linear return and everything is pointing up. Covid gave us the chance to “improvise” if you will, because the markets were a long way from this straight line up when markets tumble 35% in a one month period. By doing the planning, by preparing for bad outcomes and environments, it gave clients the financial peace of mind to get through those dark times and to stay invested. In hindsight, many of those conversations ended up saving clients millions by staying the course and not making any drastic moves like moving to cash. Difficult to do in real time, yet having a well thought out plan allowed us to improvise during a time no one could have predicted.
Collaboration and improvisation are two major tools we as advisors can fall back on. The key is thinking of those stories where you successfully were able to carry each of these out. Our job is all about fostering close relationships, building trust and in the end collaborating with our clients. Once we can do this, it allows us the chance to improvise and make strong decisions when times get tough. Both are key elements to successful long-term relationships we’re all trying to build.
Written by: Ryan Bouchey