For some clients, the focus of financial planning is just about protecting the limited resources they’ve got. For others, it’s about maximizing the potential of what their financial resources and their lives can become. The mindset of clients as they approach the world can have a significant impact their behavior.
Yet this mindset of abundance versus scarcity is not unique to clients; in fact, as financial planners our view about the world also shapes our behaviors. For instance, some become active as volunteers in the industry to get involved, give back, and even network for referrals, while others see little purpose in getting involved in a professional association with “the competition” – even though the reality is there are still more than enough clients out there for everyone.
The challenge is that, just as with clients, an excessive fear of scarcity – whether its assets and financial resources, or potential clients for the advisory firm to grow – can actually lead to outcomes that result in scarcity. Extremely conservative investment clients can actually find that inflation undermines their own financial goals, and advisors who are so fearful that there are too few clients can end out wasting time trying to convince mismatched prospects to work with them (even though it won’t be a good fit in the end). So what’s your mindset, and how does it shape your (business) behavior?