Financial advisors have often been trained to perfect their ‘elevator pitch’ as a way of generating business development opportunities, and leveraging any social situation (even casual ones like a barbeque or a cocktail party) to prospect for clients. This approach created a long-standing negative reputation that financial advisors are only in the business to sell their ‘advice’ that purely serves their interests (and not necessarily those of their clients), ultimately ending with pushing their firm’s commission-based products on a consumer who may not even want or need the product. In more recent years, though, the term ‘financial advisor’ has progressed to refer to those professionals who are in the business to provide financial guidance and advice – not just sales products – and who are held to a higher fiduciary standard. Though there have been significant strides in changing what being a financial advisor means, this lingering sales-centric reputation has often made it difficult for financial advisors to introduce themselves (especially in more casual settings) as there can be an expectation that the elevator pitch is impending.

In our 84th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how lingering negative connotations of the label ‘financial advisor’ can impact introductions in social settings, how to change approaches to introductions and the relationships that follow, and when it is okay to shift the focus from prospecting for clients to simply talking to other people.

As a starting point, it’s important to understand that not all social settings are appropriate to prospect for clients. Once they introduce themselves, many financial advisors may feel pressured to immediately talk about how they can help the person with their finances. Even though many financial advisors genuinely want to do what is best for their clients and hold themselves to higher standards in the ever-changing financial advisory industry (and their own standards), those who may not be as familiar with the financial advisory world may have a difficult time discerning when they can trust the advisor, especially in light of negative media exposure (e.g., Bernie Madoff) that has tainted the reputation of the financial advisory industry. While an advisor may want to connect with others and have a genuine conversation about the good they do for their clients, the people with whom they are getting to know can feel biased by their negative impressions of financial advisors and may not want to engage in the conversation.

Ultimately, the key point is that there is no magic phrase or term to relieve the pressure an advisor may feel is necessary to defend what they do when introducing themselves as a financial advisor. Experimenting with different terms and descriptions, along with getting more specific as to what one does as an advisor (and clarifying who they serve), can connect the listener to more of the positive things and steer them away from the negative misconceptions about what a financial advisor does. For some, the stigma that surrounds the label ‘financial advisor’ won’t be dissolved any time soon, but by engaging in real conversations, advisors can attempt to at least change the perspective of those they interact with by simply focusing on creating better relationships (regardless of whether the goal is to prospect for clients)!

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The core value proposition offered by many financial advisors is to serve and help clients solve their complex financial issues through financial planning. As an advisory firm grows, though, so too can the pressure to onboard more remunerative clients. These tensions can be heightened when a prospective high-net-worth client decides they don’t want comprehensive financial planning at all, and instead simply requests one specific service, such as portfolio management. This can create a dilemma for the advisor who wants to serve clients and help their business grow, as agreeing to only a part of the financial planning process, without fully understanding the client’s values and priorities, can feel antithetical to an advisor’s own core values… advisors need this understanding to create meaningful plans that clients can actually use to achieve their financial goals. Even though garnering enough business to maintain a healthy flow of revenue is important to any firm, it is also critically important not to compromise the values of the advisor and the firm!

In our 83rd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss some steps advisors can take when a prospect objects to financial planning in general because they only want a particular service (e.g., investing their portfolio), how to gain a deeper understanding of why the prospective client doesn’t want financial planning in the first place, and how to understand the client’s goals and values so that the services that are provided to them align with what is most important to the client.

As a starting point, it’s important to understand that while guiding clients through a comprehensive data-gathering process can certainly lead to a good financial plan, some clients may consider the experience tedious, intrusive, and unenjoyable. This can possibly be due to prior experiences with financial advisors, negative associations that a client may make with their own financial challenges, or an unwillingness to divulge personal information with an advisor whom they may just be getting to know. In these instances, advisors can still help clients simply by having a candid conversation to learn about what’s important to the client and their reasons for seeking help with their money goals. Because without the clarity of the client’s deeper purpose, advisors might provide deliverables based solely on performance and not connected to the client’s own values, and even offer services that the client doesn’t even want or need, which can alienate the client from the relationship and eventually result in the advisor losing the client’s business.

However, by asking intentional, yet thoughtful questions to identify why the client wants help can be a great way not only to connect with a client but also to show the value of discussing and reaching financial goals, which can entice them to accept the financial planning process. Because ultimately, having conversations to really understand what’s important to a client doesn’t just help advisors do a better job servicing clients with what they really need (and want), it can also lead to more trust in the relationship, which helps build deeper and longer-lasting client relationships!

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