Why Leadership in Financial Services is Valuable and Rare

Why Leadership in Financial Services is Valuable and Rare

My personal trainer, Rico, is also a drummer. He told me a story about being invited to play with a group of musicians who were more talented than he was. Being a little nervous to play with these musicians, he made the mistake a drummer can’t afford to make: He followed instead of led. Shortly into their first song, the lead guitar player stopped playing and waved off the other musicians, who stopped also. Then he turned to Rico sitting behind his drum set and yelled, “Hey, Rico, you’re the drummer! You’re supposed to be driving this train, not riding it!”

What about you? When it comes to your client relationships, are you riding the train or are you driving it? When dealing with financially successful people, you can’t afford to make the mistake of following when they need to be led.

The technical work of financial services continues to be commoditized by technology. Leadership is not being commoditized. The price of the products may continue to decrease, but the incomes of CEOs continue to rise? Why? Leadership is valuable, and rare.

The smartest FAs have already moved away from being financial plan writers, investment advisors, asset gathering middlemen, insurance experts and accountants. If you are still doing the technical work, and not the leadership work it’s time to consider this transition or transformation. It’s better for the clients and it’s great for you.

It would be a mistake to think you can effectively do both the technical work (write the plans, manage the money, develop asset allocations, do the taxes, be the insurance expert, etc.) AND be the leader. That’s like the CEO of a car company also working in the factory. She should visit the factory, but she can’t be the leader and work on the assembly line. The orchestra conductor can’t play the violin and lead the other musicians. The coach can’t also be the quarterback. Even if you were smart enough and capable enough to do all these jobs, there simply isn’t enough time. Leadership is a full-time job.

The best FAs are leaders. They lead financially successful clients to become crystal clear about their values, goals and current financial reality. Then they lead them by orchestrating the creation of a truly comprehensive plan to bridge the gap between where they are now and where they want to be so they achieve their most important goals and fulfill their most deeply held values.

They do this by holding the client accountable to implement the advice of their team of best-in-class subject matter experts in the areas of tax, financial planning, insurance, legal, investment management and everything else needed for the clients to achieve their goals.

They are especially effective at leading their clients to make smart choices about their money during those times when emotions run high and when making the best financial decisions is counterintuitive. For example, their clients stayed fully invested in 2008 and 2009. Their clients face the music of their own mortality and non-negotiable life risks by having the right amount of insurance, in all areas, despite the discomfort that some of these conversations might create. They have all their legal document ducks in a row in spite of the fact that doing so forces a person to deal with very uncomfortable scenarios—such as who pulls the plug and when.

There are a few powerful words and explanations that can help the FA leader communicate with prospects and clients about the value of having a leader rather than dealing directly with technicians.

Coordinate. “Currently, the various technical experts in tax, financial planning, asset management, insurance and legal do not have an impartial leader holding them accountable to perform at the highest levels possible. They are NOT working together with synergy and harmony for your benefit. In fact, many of them do not even know the others exist and are forced to do their work without any visibility to the important information in the possession of another technician. Your life will be much better when your technical experts are being coordinated through a collaborative process that yields better advice. I can provide the leadership to coordinate these technicians for you and your family’s benefit. How does that sound to you?”

Consolidate. “You have many more accounts, institutions and products than are necessary to achieve your goals and have diversification. The reason is that the various technicians you currently do business with don’t do this kind of work. As a result, your documentation is much more complicated than it has to be and your costs are much higher than they need to be. Your life will be much better when all of your financial affairs are as consolidated as possible. I can provide the leadership to achieve this consolidation. Would you like to get this done?”

Comprehensive. “To put it politely, there are holes in your financial house that you could drive a truck through. It’s simply by luck and the grace of God that an event hasn’t happened that turns one of these holes into a big problem for you and your family. The reason for this is that you have a variety of technicians doing bits and pieces, but nobody with a comprehensive checklist to make sure that virtually everything necessary to get your entire financial house in perfect order gets done. Your life will be much better and safer when you experience truly comprehensive financial services. I can provide the leadership to get your entire financial house in perfect order and help you keep it that way forever. This will give you the confidence that no matter what happens in the markets, the economy or the world that you will achieve your goals. How would having that kind of confidence about your future impact your life?”

Simplify. “By having one trained professional as the leader of your team coordinating the comprehensive and consolidated organization of your financial affairs, your life will be much, much simpler. This means that you can focus your physical time and mental energy on things that are more important to you and bring more meaning to your life than dealing with your money. If anything happens to you, you know the people you care about most won’t be stressed out or frustrated dealing with your technical experts and trying to figure out your unique way of handling your financial affairs. When I am done simplifying your financial life, even the most uninterested person in your family will be able to understand and appreciate your finances. Your life will be much better when your finances are simpler. I can provide the leadership to achieve this simplification. What do you think about the idea of simplifying your financial life?”

Accountability. “We hold the technical experts accountable to give you the best advice necessary to get and keep your entire financial house in order. We hold you accountable to do your part. One of the problems is that you’re driving the train. Because you have so much money and by the nature of your personality, your technical experts are following you instead of leading you. This could be because they don’t really know how to lead or they could just be afraid that if they exert leadership that you will take your business elsewhere. Whatever the case, it’s not working. The technical experts need to be held accountable to do their work at a very high level and you need to be accountable to implement their advice. What’s missing in your financial life is a leader who can make this happen. Are you ready for an FA leader to hold you and your team accountable?”

It’s very common for advisors we are training to be the leader described in this article to say something like, “But you don’t understand, Bill, I have some very successful, type-A, driver personality clients and they are not going to be ‘led.’” I know exactly what you mean and why you feel that way. What’s happening is what I call a “leadership vacuum.” A leadership vacuum occurs when one person in the relationship behaves in a wishy-washy or ambiguous way and the other person, sensing this, steps into the leadership vacuum created by that other person’s wishy-washiness. They step into the leadership vacuum even in areas where they are not actually qualified because they are leaders. It’s their nature. It’s also the nature of every leader to be a good follower, but only when the other leader is really leading. The big question here is, “How could there be a leadership vacuum in your office on your turf where you are the expert?”

The short answer is that you can’t ever allow there to be a leadership vacuum for a client to step into. I’m not talking about control. I’m talking about leadership.

What do you do if you allow even the smallest leadership crack in the conversation to develop and a client with strong leadership tendencies squeezes in? Consider something a top FA leader shared with me about how he handles this on the rare occasion when it occurs. He waits for the client who has taken over the reins of leadership to stop speaking and calmly says, “I think we need to take a step back for a moment and re-examine our relationship. One of us is the client and one of us is the advisor. Tell me again which one you want to be?” That’s leadership.

So, why are there so many technicians and so few leaders in our industry? It’s just the nature of our business. When you entered the business, you were taught the technical work: how to pick stocks and bonds, how to write financial plans, how to build portfolios, how to sell insurance and how to prepare tax returns. You probably worked hard to get some designations (CFP, CPA, CFA, CLU, etc.) and you take pride in your technical skills. Nobody told you that someday your technical ability was going to progressively diminish in value and that your leadership skills would become your most important asset. You were probably not even offered leadership training that could be applied to serving your clients and running your business. The bottom line is that leadership is a choice. You can choose to remain a technician or you can choose to be a leader.

The recipe I have described here, leading a team of best-in-class technical subject matter experts who are coordinated, comprehensive, held accountable to a high standard where everything in a client’s financial life is consolidated and simplified will help you rescue the most financially successful clients from the FA technicians who dominate the landscape of our industry.

Your business will flourish and your clients will be better off.

Bill Bachrach
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For over 25 years Bill Bachrach has been teaching financial professionals to speak the language of trust and the art of building high-trust client relationships. Beginnin ... Click for full bio

Solving Your Biggest Client Issue May Be at Your Fingertips

Solving Your Biggest Client Issue May Be at Your Fingertips

Written by: Shileen Weber

When the American Funds’ Capital Group  asked 400 advisors last year to name the biggest issues they face in their businesses, it wasn’t the DOL, market uncertainty or the economy that sat in the center of the idea cloud of answers.

It was client issues.

At a time when regulatory concerns and market turbulence would seem to be at all-time highs, the advisors who answered the survey were most concerned about servicing their clients as well as ways to find new ones and grow their businesses.

It’s one of the ironies of the business, that the things most people find so hard to manage – creating financial plans, managing assets and staying ahead of events – are what advisors find to be the easiest parts of the business. Marketing - the business of selling themselves – can be the area advisors find the hardest elements to master.

In this age of instant communication, it can be even more intimidating to market your practice, especially to younger clients for whom many traditional methods like newsletters, postcards and phone calls don’t work anymore. For them, email is the preferred way to get information, and, if it’s important, they are more likely to respond to texts, not phone calls.

But, it doesn’t have to be that hard. The digital age gives you access to ideas and content of all kinds you can use to touch your clients in a way that positions you as a valuable resource. The key is to keep it simple, stick to some basics and create consistent outreach that clients and potential clients are interested in and will appreciate you sharing with them.

Here is a common-sense approach you can take that will not require you to hire an expensive agency or take valuable time away from managing your clients’ assets and running your business.

Content is King


Create a content calendar for the year: Think about reasons to touch a client 13 times during the year – that can be once a month and on their birthday. (The common rule of sales is that it takes at least 7-13 touches to make a connection.) The number is limited and keeps you from inundating the clients who likely already feel inundated with content. You can take the seasonal approach – tax planning in the fall, January for account review content, college financing in the spring – and supplement it with topical events during the year. Creating a calendar will help you stick to a plan. Here’s one resource for a content calendar.

Review what content is already available to you:  Basically, this means finding the resources you already have and determining what pieces will be most valuable to your clients. Start first by checking out content your broker-dealer already generates that you can personalize. Many firms have economists who write regularly about the market. That’s content you can pass along to keep clients up-to-date they would not have access to anywhere else. In addition to your broker-dealer, mutual funds, your clearing firm, and money managers are all excellent sources of informative and even analytical content.

Personalize the content you use: Add your name, the client’s name or some way to avoid making it feel like canned content that you are using just to check the outreach box. See what capabilities your email program may have to help you.

Related: What's an Investor to Do When History Doesn't Repeat Itself?

The birthday strategy: One advisor used clients’ birthdays in a new way. Instead of the card or lunch date, the advisor asked the client’s spouse for a list of friends he could invite to a birthday lunch and made it a memorable event that was also a soft approach to getting referrals.

Become a curator of good content: What your review will show you is that you don’t have to generate the content yourself. You can point clients to pieces you find insightful. You are likely already doing this every day just to keep yourself informed. The next step is to compile it and send out the very best pieces to your clients, again, with a note with your own thoughts about why you found it valuable.

Find out what is working and do more of it: Use your client interactions, in-person and online, to find out what types of content clients liked and any they didn’t. You can use tracking on your emails to see how many were opened as a measurement tool, but the personal interactions tend to provide more insight than raw data.

Be disciplined about your execution: Get help from an office assistant or schedule the time each month to do the content development and outreach. As any good strategy, if you make it a habit, it won’t seem so hard.

Most importantly, be yourself and be personal: You may want to regularly get personal by talking about your family and hobbies. The ultimate is if you can provide content that is personal to your clients, not just about their investments – they get that from their statements, apps and online portals. Think alma maters, hobbies, children and parents.

Of course, as a disclaimer, you have to make sure all content and communications are complying with regulations and the rules of your own broker-dealer.

The process of creating a plan will get you thinking about your clients in a new way. That exercise alone can re-energize your business and get you seeing marketing opportunities in places you may never have seen them before.

Shileen Weber is Senior Vice President of Marketing and Communications at GWG Holdings. She was previously Director of Online Strategy and Client Experience at RBC Wealth Management, where they placed first in two JD Power and Associates U.S. Full Service Investor Satisfaction Study (2011 and 2013).
GWG Holdings, Inc.
Investing in Life
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GWG Holdings, Inc. (Nasdaq:GWGH) the parent company of GWG Life, is a financial services company committed to transforming the life insurance industry through disruptive and i ... Click for full bio