Some Advisors Don’t Know What They Are Doing

For example, everyone told me I needed a specific life raft that was supposed to be the best in the industry, and it cost a whopping $10,000! Now, life rafts are something you need, but this particular raft felt like overkill.

And dropping thousands of dollars on a life raft wasn’t the only change I was told I needed to make. Whenever I came into port, I was overwhelmed with unsolicited recommendations about buying dozens of other pieces of equipment.

Oh, you know what you need? You’ve gotta get these very expensive solar panels.

Hey, listen, you should really invest in this generator.

Stop wasting your time with those generic solar batteries. You need this specific brand instead. It’s better. Trust me.

These suggestions were constant, and I was getting worried that I was living on a boat all wrong – that my supplier had lied to me and that I had bought crappy gear. One day, I came into port and noticed that not a single boat had the life raft that dozens of people told me I had to have.

I began to ask these boaters if they used the things they were telling me I needed.

Usually, they’d get real quiet and mumble, “No, I don’t have that, but I heard it was good.”

On the rare occasion a boater had the thing they said I needed, I asked when was the last time they used it.

Guess what? Even though they had that fabulous generator or those flashy solar batteries, they had only used them once or twice – if at all.

Do you actually do this?

This became the screening question I asked about my boat, which needs to be the question you ask in your practice.

It doesn’t matter if you’ve been in practice for three weeks or 30 years. You’ll hear many opinions, so you need some way to filter the junk from the things that work.

Hey, I recommend you do this website thing.

This is how you should be marketing.

Here’s how you should ask for referrals.

Anytime someone suggests an action, don’t be afraid to ask how it worked for them. If an advisor reworked his website and told you should too, ask him how it changed his practice:

What numbers did you see, and how were your conversion rates improved?

If he tells you he didn’t get any new leads, but his website “looks cooler,” you don’t need to spend $25,000 to rework yours to match his.

We need more transparency in the profession. We need to spend more time discussing what works and doesn’t – not what theoretically should succeed or fail.

We need more advisors willing to share that they tried XYZ but it didn’t work, and lay out their expectations, their processes, and where they fell short.

We must stop dismissing our screwups so we can all learn to be better advisors and run more efficient practices.

In a social experiment, Lewis Schiff of Birthing Giants found that the people who saw no success in life didn’t share their failures with their friends. Whereas those who were wildly successful frequently discussed their shortcomings with their friends, highlighting the importance of taking advice and listening to experience.

The next time you’re at a conference, make the most of your experience and ask questions instead of sitting down with other advisors and chatting about nothing.

Ignore the loudmouth telling everyone what to do and seek out the person with the most wisdom in the room – hint, they will likely be the quietest.

Filter wisdom from folly by asking probing questions.

For example, asking about RMDs is a great place to start; it's a casual enough topic that people will open up to you, and once they feel comfortable, you can dig deeper.

Another excellent icebreaker is asking advisors what they wish they had known when they first set out in the profession.

Once you start probing for more details, you’ll get a good idea of who is getting results, who has the numbers to support their success, and who’s full of hot air.

Once you’ve identified the people making strides, do everything you can to learn from those willing to share their experiences honestly.

Action Items

What are your criteria for measuring success?

This week, write down how you want to measure success and what numbers you want to use. Remember that your numbers must be real numbers that a third person can verify.

This doesn’t mean you need to hire an auditor, but you could bring in a virtual or executive assistant to pull those numbers.

Set a time when you’ll review these metrics and select a date when you’ll make critical business decisions based on these metrics.

Unsure what numbers you should be tracking? Contact [email protected]. Our team will give you those numbers from the practice analyzer we use with every advisor we coach. Matthew Jarvis, CFP®, ChFC, is the co-founder of The Perfect RIA, one of the industry's most recognized advisor training platforms. Just 10 years prior, Jarvis was buried in debt, with a badly struggling practice and a morning routine of trying to figure out how to quit the industry without looking like a failure. Through several turns of fate, Jarvis clawed from near failure to the top of the industry. Today, alongside running his incredibly profitable and successful practice, Jarvis guides other advisors on duplicating his success in their practice.

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