If you could actually measure the value that your clients place on their relationship with you, it would look like a simple formula. The quality of your relationship is going to be a function of what a client finds valuable minus the negative aspects of the relationship.
On the plus side, you would place your ability to meet your cli- ents’ expectations plus the efficiency of the administration process.
Quality of processing is seen as a positive because it is the way that your firm communicates with clients on the trades that they make, the performance of their investments, and the efficiency of your administrative staff. If you are in a position where this part of your re- lationship with the client is actually negative, you may have to assess the quality of your administrative support.
8 / Raising Your Value in the Eyes of the Client 87
On the negative side of the equation, there are two main factors:
the cost to the client of maintaining a relationship with you, and the presence of competition. Cost is much more than dollars and cents;
it can also include subjective considerations such as opportunity cost or emotional cost. As your clients continually weigh the pros and FIGURE 8.2 Financial Products and Their Benefits
Product Benefit to Your Client’s Life
Investment To help our clients manage their assets so that management they will maximize the amount of money that
they have to enjoy the lives that they want.
Tax To maximize the amount of money available to planning our clients so that they are free to spend money
on the things that they enjoy.
Estate To provide our clients with plans to let them pass planning on as much of their assets as possible to those
who are the most important to them.
Retirement To give our clients access to vehicles that will let planning them build as much of a retirement nest egg as vehicles they can so that they can enjoy their futures.
Life insurance To help our clients protect those who are the most important to them.
To help our clients build assets for the future in ways that they may not be aware of.
Disability To help our clients ensure that their loved ones insurance and their way of life is protected from some of
life’s challenges.
Critical illness To develop strategies that will give our clients insurance peace of mind in the event that something
happens to them that will make it difficult for them to provide for their families.
Critical care To work with our clients to make sure that they insurance understand some of the challenges of getting
older and that they plan ahead to ease the burden on those they love.
8 / Raising Your Value in the Eyes of the Client 89
FIGURE 8.3 Delivering Value
Value Cycle Advisors in the past Advisors in the future 1. Education Financial-oriented Life planning
Product-specific Career transition Market information information
Rates of return Health/lifestyle-related Risk/reward Income strategies
Financial coaching Family-oriented Goal setting
2. Communication Left brain-oriented Right brain-oriented Performance- Life-oriented
oriented Specific, unique, Cookie cutter, client-oriented,
generalized, systematic, and sporadic, and proactive
reactive Client-friendly Advisor-friendly
3. Reporting Performance- Life goal-oriented oriented Online tracking Meet minimum On demand
requirements Customized to client needs
4. Financial Accumulation Income strategies planning strategies Lifestyle-related
Long-term Customized retirement Life-oriented Generalized Team approach Financial-oriented
Individual planner
5. Investment Market related Asset management advice Short-term Overall safe returns
performance Tax efficiency
Capital gains Shorter-term investing Long-term investing
6. Products Mutual funds Managed accounts Individual stocks Individual portfolios Variable annuities Lifestyle-oriented Whole and term life education
cons of working with you, they will mentally calculate the worth of maintaining a relationship with you. There are always plenty of al- ternatives available to your clients if you have failed to meet their ex- pectations or satisfy their needs.
Steven Covey talks about “the emotional bank account” in his book, 7 Habits of Highly Effective People. Every time we do well in a re- lationship with communication and interaction, it is equal to “mak- ing deposits.” Each time we fail to communicate, show sufficient interest, or meet unspoken expectations, it is equal to “making with- drawals.” Based on this concept, how many of our clients would say that our relationship with them is in overdraft or surviving month to month? Clearly, there is much more we can do to make better emo- tional connections with our clients.
C h a p t e r
9
What does money represent to your clients? What tangibles and intangibles do they hope to purchase with their assets? We will address the specifics of what today’s clients say they want their money to buy.
Their “shopping list” is equally filled with intangibles that they see af- fecting their quality of life and tangible items that most advisors are accustomed to and comfortable talking about. In one sense, much of what the financial life planning discussion is about for the advisor is expanding the conversation from the tangible product to the intan- gible product. In this chapter we will survey the following:
• Why people want to be millionaires
• How money or lack thereof affects major life decisions
• What matters to the wealthy
• What matters to the achiever