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It is time for a change in basic assumptions in the financial industry.
Society already feels like money is a stressor. According to a Bankrate survey, 47% of U.S. adults report that money negatively impacts their mental health. Traditionally, the industry has emphasized clients' net worth, which implies that a person’s worth to this world is directly correlated to their net assets, not their being. These words overlook the importance of overall wellbeing. They perpetuate the misconception that only wealthy individuals deserve financial guidance and they harm mental well-being.
Advisory owners and their teams benefit from considering their own and their clients' diverse life aspects, such as education, health, relationships, and career choices. This is where the concept of net wealth comes into play — the notion that well-being is more important than material ownership. By focusing on net wealth and recognizing that worth extends far beyond assets, advisors can empower themselves, team members, and clients to mitigate financial stress and promote overall wellbeing.
Implementing the net wealth mindset in practice involves developing detailed financial plans that align with each client's needs and priorities, and crafting a client-centered service model. This approach benefits clients and advisors, supporting crucial business goals: improving client relationships, productivity, profitability, and growth. By fostering stronger relationships and understanding clients' overall life goals, advisors can enhance client satisfaction and loyalty, increase productivity, and drive business growth.
Implementing the Net Wealth Mindset
Implementing the net wealth mindset in your financial advisory business involves intentionally changing your processes, communication, and culture. Consistently work on the business, not just in the business. Consider how you can integrate the following strategies into your approach:
Reframe conversations
By shifting the focus from net worth to net wealth by asking open-ended questions about clients' life goals, values, and aspirations.
Integrate lean-operations improvements using the IDEOS™ methodology:
Apply this five-stage approach to streamline your business operations, reduce waste, and create more value for clients:
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Integration: Implement software integration to reduce work and improve data accuracy across systems.
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Delegation: Prioritize your day around key areas (marketing, managing, servicing, and mentoring), and delegate tasks that fall outside these categories for optimal efficiency.
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Elimination: Remove duplicate or unnecessary steps in your operations practices, including tasks that are inefficient, ineffective, or repetitive.
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Outsourcing: Hire external experts to perform services traditionally done in-house, allowing you to access specialized knowledge and cut costs.
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Staff recalibration: Reassess your team's roles and responsibilities after implementing improvements to ensure an optimal workload distribution.
Communicate your commitment and approach to clients
Share your process in a visual diagram on your website, in marketing materials, and during client meetings that outline your entire financial planning process, from the initial inquiry call to the strategy meeting. Clearly explain the purpose of each stage to attract similar clients and set your practice apart in a competitive market.
Continuously learn and adapt
By staying informed about emerging trends and best practices related to holistic financial planning by attending industry conferences, reading relevant publications, and networking with other advisors who prioritize the net wealth mindset.
Crafting a Client-Centered Service Model
Crafting a client-centered service model is crucial for delivering efficient, consistent, and personalized financial advice. A well-defined service model should outline key actions, responsible team members, and the use of technology. This structured approach fosters accountability and ensures clients receive the support they need throughout their financial journey, ultimately building trust and strengthening the client/advisor relationship.
Within the first 60 days of onboarding a new client, it is essential to communicate your team's expectations regarding the frequency, method, and scheduling of interactions. While this basic level of communication is necessary to maintain the client relationship, providing a truly referable experience requires a deeper level of engagement.
To ensure exceptional and scalable service, determine how and when your team will engage with clients at different tiers. Higher-tier clients may benefit from more personalized attention, such as monthly check-ins or acknowledging significant life events discovered through social media monitoring. This level of involvement can lead to additional opportunities, like connecting with a client's spouse or assisting their college graduate in finding an internship.
Tracking these deeper-involvement efforts in your customer relationship management (CRM) system is crucial to maintaining a consistent and outstanding client experience. The benefits of creating a memorable client experience include:
- Make your clients feel heard, valued, and appreciated.
- Retain more top-tier clients.
- Receive qualified referrals from more top-tier clients.
- Build a reputation as a leading service provider in that niche.
A positive client experience is a powerful marketing tool for your business, as satisfied clients will likely generate word-of-mouth referrals. You can cultivate long-lasting relationships and build a thriving financial advisory practice by consistently delivering exceptional service tailored to each client's needs.
Embracing the Industry's Future
Adopting a net wealth mindset can significantly enhance financial advisory practices by strengthening client relationships, optimizing financial planning, boosting profitability, and promoting professional growth. By focusing on clients' broader life goals and values, advisors can foster trust and ensure personalized attention, increasing client satisfaction and loyalty.
Furthermore, embracing this mindset enables advisors to simplify their processes, create customized solutions, and use their time efficiently, ultimately enhancing productivity. This approach sets advisors apart in a competitive market, helping them attract new clients and foster business growth. A great client experience doesn't just happen by chance; it requires a commitment and calculated effort to make clients feel valued and appreciated. Developing a client-experience strategy ensures ongoing success, saves energy and time, and can benefit your business through qualified referrals.
As the industry evolves, embracing the net wealth mindset encourages ongoing professional development, ensuring advisors remain adaptable and capable of delivering exceptional service. Advisors can foster trust and provide personalized attention by focusing on clients' broader life goals and values, increasing client satisfaction and loyalty.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
