feed - Part 9

How Advisors Can Get Client Referrals By Identifying “Active Promoters”

March 11, 2024 07:04 am 0 Comments CATEGORY: Marketing

Referrals can play a vital role in the growth of financial advisory firms since finding prospective clients via referral requires virtually no hard-dollar costs, and it takes only a fraction of the time needed for other marketing channels like social media, blogging, and seminars. However, finding reliable sources of referrals can sometimes be challenging for advisors: Centers of Influence (COIs) like accountants and attorneys may not be as attuned to the advisor's services as the advisor's clients themselves, yet asking current clients for introductions to people in their networks can be awkward since not all clients are equally receptive to being asked to provide referrals (and clients who aren't inclined to offer referrals can even have a negative reaction to the request, potentially damaging the advisor-client relationship!).

In this guest post, Todd Fithian, co-founder and managing partner of The Legacy Companies LLC, discusses a systematic approach that advisors can take to ask clients for referrals. By first identifying clients who are receptive to the idea and who would most likely be viable referral sources, advisors can focus their efforts on those clients rather than devoting resources to clients who wouldn't want to be approached for a referral in the first place. By designing simple surveys to determine clients' Net Promoter Scores, advisors can divide their clients into groups of those who may be more (and less) likely to want to 'promote' (i.e., refer others to) the advisor. This can help the advisor decide who to ask for a referral and who to avoid the subject with – although for the latter group, scheduling a separate meeting to discuss potential issues that underlie the clients' reluctance may provide valuable insights about both the advisor's processes in general and any relationship concerns the client may have more specifically.

After identifying potential clients who might serve as good "active promoters", advisors can take the next step by asking clients whether they'd be willing to refer people in their networks who might benefit from the advisor's services. One way to do this is to invite the client to a Dedicated Introduction Meeting (DIM) where the advisor and client can review the client's personal or professional networks and pinpoint contacts who might align with the advisor's firm and benefit from working with the advisor. To this end, it's essential to provide the client with guidance by clarifying the advisor's ideal client profile (since prospective clients who align best with the advisor's value proposition will more likely become clients themselves), which will also help clients narrow the list of introductions to contacts who would be a good fit with the advisor.

Ultimately, the key point is that asking for client referrals shouldn't feel like it pushes any boundaries with uncomfortable requests; instead, it should feel more like a natural progression of the authentic relationship built between the advisor and the client. By developing a process centered around respect for the client's willingness to open up their network to the advisor – as well as their trust that the advisor could serve those potential clients well – advisors can make the process feel more natural for clients while effectively bringing in their ideal target prospects!

Weekend Reading For Financial Planners (March 9-10)

March 8, 2024 01:58 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that RIA clients of an insurance broker providing Errors & Omissions (E&O) coverage saw a 213% increase in claims paid in 2023, attributed to significant jumps in suitability claims (likely stemming from the 2022 market downturn) and claims related to wire fraud. Which suggests that financial advisory firms could potentially mitigate their potential exposure to future exposures by reviewing asset allocations with clients more frequently (to ensure they understand and approve of the advisor’s recommendations) and by maintaining strong policies and procedures related to client wire transfers (and ensure firm staff is trained on them!) to prevent fraud.

Also in industry news this week:

A recent survey has found that a majority of prospective financial planning clients across all age brackets are open to working with a remote advisor, creating opportunities for advisors to grow their businesses and for clients to find the ‘best’ advisor for their needs, regardless of their location
A federal judge has ruled that the Corporate Transparency Act, which requires small business entities such as LLCs and corporations to report identifying information on their "beneficial owners", is unconstitutional, raising questions about whether businesses (including certain non-exempt financial advisory firms) will be required to comply with its requirements

From there, we have several articles on practice management:

Why many RIAs are experiencing high staff turnover and how a more deliberate approach when hiring could lead to more successful hires
The key behaviors that can help a newly promoted manager succeed, including the need to set and communicate clear goals and the ability to provide regular feedback to team members (without micromanaging)
How firms can avoid wrongful termination lawsuits, from establishing clear policies in employment agreements and employee handbooks to considering whether to offer departing employees a severance package

We also have a number of articles on investment planning:

Why the well-known (and frequently judged) “60/40” portfolio could have a bright future, despite the poor returns it experienced in 2022
While a diversified investment portfolio can offer significant risk-management benefits, it also tends to come with periods of underperformance that can be challenging for investors to withstand
Why U.S. stocks have dominated their international counterparts during the past decade and whether it still makes sense to have exposure to international equities

We wrap up with 3 final articles, all about decision-making:

Why research suggests that individuals make their best financial decisions in their early 50s and how advisors can support clients across the age spectrum based on their unique skills and weak points of view
Why it’s important to recognize that there often is no “Secret Option C” when it comes to make a challenging decision with 2 distinct options, and how advisors are well-positioned to help clients overcome the tendency to put off these tough choices
How a structured framework can help advisors make decisions when a seemingly unlimited number of options are available, from choosing a niche to deciding what to discuss when leveraging content marketing

Enjoy the ‘light’ reading!

The Latest In Financial #AdvisorTech (March 2024)

March 4, 2024 07:01 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the March 2024 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that advisor lead generation platform Datalign Advisory reached nearly $15B in referred client assets (and almost $3B in actually-converted assets) in just its 2nd year of business, as advisor demand for paid leads continues to rise (especially with Datalign's flat-fee one-advisor-per-lead model)… though arguably the greater significance is simply that new advisor lead gen platforms have still been able to find new channels to market to in order to create an ongoing flow of leads (while raising the question of how much further the category can grow before the competing platforms start to saturate the consumer marketplace?).

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Salesforce Financial Services Cloud highlights a new pre-built multi-custodial data feeds solution in its AppExchange, dubbed Attune and powered by BridgeFT, as the CRM provider seems to come 'downmarket' into mid-sized independent advisory firms that want Salesforce's depth but don't have the internal resources to fully customize it from scratch.
SEI invests $10M into TIFIN to support its development of new AI tools for wealth management, in a model that could both help SEI navigate the infamous "Innovator's Dilemma" of being a large incumbent trying to innovate, and could represent a model that helps to fund more early- and mid-stage AdvisorTech startups (especially as the VC/PE funding environment continues to slow)

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

Nebo Wealth partners with Advyzon's Investment Management (AIM) platform to 'TAMPify' its software, which models, illustrates, and optimizes a Liability-Driven-Investing style of portfolio design, customized for each individual retiree client… but until now left advisors on their own to figure out how to scalably implement when each client's portfolio was different.
Fabric Risk is acquired by MSCI as adoption continues to be sluggish for advisors building truly personalized-to-each-client portfolios, given both the operational difficulties of implementing, and the simple reality that pursuing such an approach can mean a material change to the advisor's existing investment story with clients (which is often a disruption that advisors would just prefer not to deal with!)
A new AdvisorTech category for "Prospecting" appears on the AdvisorTech Map, as a slew of new startups including Catchlight, AIdentified, FINNY, Wealthawk, and Equilar bring AI (or at least, advanced analytics) to help scrub advisors' lists of leads and figure out which ones are really Qualified prospects that advisors will get the best ROI on their time by pursuing.

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

Using Reflection Questions To Help Prospects Find Clarity And Focus On A Shared Planning Vision

February 28, 2024 07:03 am 0 Comments CATEGORY: Client Trust & Communication

Initial outreach to a financial advicer rarely (if ever) results from a prospective client waking up in the middle of the night in a cold sweat because they just figured out that they're in desperate need of a comprehensive financial plan. Rather, prospects often reach out to set an initial appointment only when they realize they have a specific pain point that they need an advicer's help with. It's during that first meeting that an advicer has an opportunity not only to demonstrate how they can help the prospect solve whatever problem they may be experiencing but also to gain valuable insight into the prospects themselves so that they can begin laying the foundation for what could evolve into a long-lasting professional relationship. Apart from spending time during the first meeting only to gather facts about the prospect, advicers can also utilize a variety of techniques to focus on who the prospect is, start building rapport, begin to establish a meaningful connection, and even set the stage for emotional buy-in.

In a discovery meeting, advicers have a short period of time to gain a deeper understanding about the prospect and establish a connection that will motivate them to become a client. And by asking good questions during that initial meeting, an advicer can learn about a prospect's main concerns and what sort of advice they need. One of the best ways to accomplish this is by asking questions that encourage the prospect to pause and reflect more deeply on the issue at hand. Such 'reflection' questions ask an individual to reflect on whatever information they've just offered in order to find personal meaning in what they've shared and why it's important to them. They are particularly effective in building rapport, because the simple act of asking reflection questions shows that the advicer has been listening closely and is interested in the prospect as a person, not just a potential client.

At a basic level, reflection questions are often framed as "this or that" statements which offer 2 ideas for the prospect to consider. Part of an advicer's job is helping prospective clients gain clarity around their goals, and it often takes several meetings for those goals to become well-defined. However, "this or that" questions can help break down daunting issues (like what a fulfilling retirement might look like for the prospect) by offering just 2 scenarios that they might consider as viable options for what their future might look like, with the caveat that alternatives are always available if neither felt 'right'.

Alternatively, advisers can introduce reflection questions using the phrase, "it seems" as a way to rephrase and summarize something a prospect said in order to elicit additional thoughts. The "it seems" framework is particularly useful when prospects need help prioritizing multiple goals. For instance, an advicer might observe that "it seems that saving for your child's education is important, but it also seems that you're concerned about whether or not you'll be ready for to retire when you want." Notably, such reflection questions aren't meant to tell the prospect which issue is more important, but rather, are meant to help the prospect identify their own reasons for how they should prioritize their goals.

Ultimately, the key point is that reflection questions can be used to help prospects identify the actions they can take to make progress toward their goals, narrow down which of their goals will be the most impactful, and offer prospects the motivation to stick with their financial plan. Finding the motivation to move forward is challenging when the path is unclear, and reflection questions can help prospects find clarity around their values and goals, which can also help them appreciate the value that a financial advicer brings to the table as a valued partner in their journey towards their long-term goals!

#FA Success Ep 373: Transitioning To Launch A New RIA By Taking On Passive Investors For Startup Capital, With Ben Hockema

February 20, 2024 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 373rd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Ben Hockema. Ben is the Founder of Illuminate Wealth Management, an RIA based in Barrington, Illinois that oversees $100M in assets under management for 55 client households.

What's unique about Ben, though, is that he spent 13 years successfully working his way up the career track at a growing advisory firm, starting as an intern and eventually making partner… only to realize within 18 months that it wasn't a good culture fit for him and that he'd need to leave, but then figured out how to take on passive equity investors in a new startup RIA who helped to finance his ability to buy out a portion of his client base from the firm he was leaving in order to build the business he really wanted to build.

In this episode, we talk in-depth about how Ben leveraged some of his personal relationships to find 2 passive investors who were willing to give him money in exchange for a 25% stake in his new RIA and the 16 existing clients he'd be buying out from his prior firm, how, through developing a structured annual client service calendar guiding their offerings month-to-month throughout a given year, and a fee schedule structured around a client's net worth, Ben has been able to attract prospects and rapidly grow his client base from $16M to $100M in just the past 3 years, and how Ben's successful growth phase led him to do a second round of capital with a wider base of 13 investors where he sold another 10% of his equity in order to further paydown his debts incurred in the original RIA transition and launch.

We also talk about Ben's journey from a 3-summer long internship at his first firm, to being offered the opportunity to take over an acquired firm and its client base in Chicago, to being asked to become part of the ownership team, how Ben then realized that his entrepreneurial goals and willingness to take risks on new ideas were ultimately misaligned with the desires of the other owners and that staying in an environment that had admittedly been very successful for over 30 years would still likely leave him bored and disengaged, and how Ben found that he needed to spend time working with a therapist to manage the grieving process that came from realizing he'd need to sever business relationships he'd spent more than a decade building.

And be certain to listen to the end, where Ben shares how he took it upon himself to find his own advisor study group of peers that ultimately become his most valuable support asset through a decade of transitions, Ben's discovery that, despite his imposter syndrome throughout several shifts in his career, that being willing to ask the questions that you fear might be 'dumb' questions and are afraid to ask can help open doors and bring growth opportunities to light earlier, and how Ben has now transitioned from having been the intern who grew all the way to advisor and then partner to trying to create a work environment that affords a safe space for younger, newer advisors to similarly get the opportunity to grow and develop as he did in his early career.

So, whether you're interested in learning about how to listen to your gut when you find yourself misaligned with the business you're deeply invested in, ways to structure your client services calendar in a way that allows clients to let go of their worry about money because of the trust they have in their relationship with you and your firm, or how to build a team, no matter how small, that truly fits with the trajectory of the firm and proves to be the perfect balance you are looking for, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Ben Hockema.

Highlights From The 2024 T3 Advisor Conference

February 19, 2024 07:03 am 0 Comments CATEGORY: Conferences

The 2024 Technology Tools for Today (T3) Advisor Conference, held last month in Las Vegas, Nevada, featured a large gathering of financial advisors and representatives from across the fintech industry. Hosted by Joel Bruckenstein and his team from T3 Consulting, the conference focused heavily on the relationship between financial advice and its accompanying fintech, covering everything from how AI and other tech developments are changing the advisor landscape in unprecedented ways to the importance of stringent cybersecurity measures, tech-stack integrations that actually work together cohesively and seamlessly, and the value of retaining the human essence in a wealth management landscape that is constantly moving forward.

In this guest post, Craig Iskowitz – CEO and founder of Ezra Group, a financial technology consulting firm – highlights this year's conference with his signature Twitter-driven recap, featuring presentations on the compelling paradox of AI; as while AI has become increasingly associated with overcoming human limitations with its efficiency, accuracy, and convenience, its weakness actually lies in its lack of humanity and inability to establish human connections. For example, Snappy Kraken emphasized how delegating tasks to AI tools can increase efficiency beyond what advisors can do on their own, and TradePMR shared their own (surprising) experience that their highly skilled personal concierges were actually AI bots; however, both companies conceded that technology can only go so far without a human relationship acting as the 'engine' for all of these (automated) pieces.

A continual thread through the conference was the ongoing effort to build a truly cohesive tech stack. In the wake of an AdvisorTech boom over the last decade, many advisors have all the tools they need to build truly comprehensive solutions for their clients. However, as Pershing Wove's Ainslie Simmonds points out, 65% of affluent investors are willing to leave their advisors if they do not offer an integrated tech experience – and in fact, having interoperable tech was a key component to growth.

Other major highlights from the T3 Advisor Technology Conference included:

Several speakers, such as Craig Ramsey and Rich Cancro of Advisor Engine, emphasized how processes are quickly changing in the new face of technology, and FP Alpha emphasized that right now presents a better opportunity than ever to reexamine old practices to see what can be simplified, automated, or altered.
At the same time, Morningstar's CEO Kunal Kapoor highlighted that efficiency comes with a greater demand towards personalization, and Orion's new CEO Nataline Wolfsen also spoke of the importance of aligning technology with the human elements of trust, shared values, and personal understanding.
Apex Fintech Solutions noted that the average advisor rings in at a cool 97% retention rate for acquired clients, suggesting that net new assets may provide a clearer lens for growth than the more traditional AUM metric. In the same vein, they also highlighted that hybrid firms (i.e., those that offer both digital robo-advice and human touch) are growing faster than almost everyone else, with 24% of net new cashflows despite the low aggregate number of firms with this business model.
Of course, with digitalization, integration, and automation comes cybersecurity risks. Digital hygiene, encryption security, and good staff training can all be enormous factors in the overall safety of the company, as explained by Patrick Hennessy, Schwab's Director of Business Consulting.

Finally, the annual T3/Inside Information Software Survey, which assesses the software programs used by financial advisors, found that tax planning tools are on the rise – with adoption rates jumping from 30% to 43%. Likewise, while CRM usage has slipped by about 5%, the overall number of advisors who use a CRM still remains at a dominant 92%. And lastly, as data becomes more comprehensive in today's digital landscape, cybersecurity rises in importance – and cybersecurity tool adoption remains on a slow, but steady, rise.

Ultimately, the 2024 T3 Advisor Conference brought together advisors, leaders, vendors, and students from all across the financial advice industry to share insights on threats, changes, observations – and, of course, to examine new opportunities in a constantly shifting fintech landscape. As software providers grow in number and their offerings expand in complexity, automation and cybersecurity will be central themes as client preferences continue to change. Which means that there is plenty of space – and demand – for technology to evolve, continually helping more advisors to be better, and more successful, and also allowing for the definitions of 'better' and 'successful' to grow as our technology options do as well!

A Proposed Salesperson’s Exemption To The DoL’s Retirement Security Rule?

February 14, 2024 07:01 am 0 Comments CATEGORY: Regulation & Compliance

When an investor is seeking to work with a financial professional, there's a substantial difference in expectations about the nature of the relationship when the professional being consulted is an advisor versus when they're a salesperson. In hiring an advisor, the investor is presumably seeking to put their trust and confidence in someone with their best interests in mind who can advise them on a course of action. Whereas in a sales transaction, the investor is most likely aware that a salesperson's job is simply to sell a product, which puts the onus on the investor (rather than the professional) to evaluate the salesperson's pitch and decide whether or not to act on it.

The difference between an advice and sales relationship isn't necessarily problematic on its own, since some people truly do just want to buy a product from a salesperson, rather than go through the time and cost it takes to be thoroughly advised on the best strategy. However, if an investor is unable to recognize whether they're engaged with an advisor (where they would expect the advice is truly in their best interest) and when they're engaged with a salesperson (specifically intended to sell products), they may be persuaded to take actions that are not truly in their best interests.

As a result of this dynamic, there is a long regulatory history of separating sales and advice, going all the way back to the Investment Advisers Act of 1940, which strictly limited the use of the then-popular "investment counsel" title to be used only by those who were actually in the business of giving investment advice, and forbidding its use by those primarily providing brokerage services. However, by the 1970s, the "investment counsel" term had largely fallen out of use in favor of the more generic (and less regulated) "financial advisor", which grew in popularity as insurance and mutual fund salespeople began to co-opt the title and position themselves as "advisors" while still being both compensated and regulated as salespeople. To this day, slews of professionals from the investment, brokerage, and insurance industries still use the "financial advisor" title without being registered as being in the business of giving investment advice – leaving many investors who hire them confused about how their "advisor" might not actually be an advisor expected to give them advice in their best interests.

Against this backdrop, the U.S. Department of Labor (DoL) has released a new proposed Retirement Security Rule that aims to apply new fiduciary standards to professionals who give investment advice to retirement investors when a relationship of trust and confidence exists between the advisor and the client, which would encompass both registered investment advisers, and insurance agents and brokerage representatives offering advice recommendations as well. But while DoL's proposed rule applies to professionals based on the functions they engage in (e.g., the level of personalization/customization of the advice recommendations), it has also expressed interest (via a Request for Comment on its proposed rule) in how a retirement advice provider's title may or may not create an expectation of trust and confidence. For example, if a professional holds themselves out as a "financial advisor", a prospective retiree who hires them may presume that the professional will provide advice – recommendations that are in their best interest – even if that professional isn't actually obligated to do so.

Arguably, though, the DoL still misses the true significance of the role that advisor titles play. As ultimately, there may be no actual functional difference between the type of questions and the specificity of recommendations made by advisors versus salespeople; instead, the difference between sales and advice is driven by the consumer's expectation of whether they're working with someone in an advice or sales capacity in the first place. Which is first and foremost defined by the way the financial professional titles themselves and markets their services.

As a result, one of the most straightforward ways to re-assert a clearer line for consumers between advice and sales is simply for the DoL to permit insurance agents and brokerage representatives to continue to be salespeople… so long as the professional does not hold themselves out as being a financial advisor or market that they offer financial planning.

Such a "Salesperson's Exemption", which would allow insurance and brokerage salespeople to avoid the DoL's fiduciary obligation in the Retirement Security Rule, would apply to salespersons who (1) avoided holding themselves out as financial advisors or financial planners, (2) avoided marketing that they offer any financial advice or financial planning services, (3) and provided disclosures on all sales presentations or illustrations to the effect that the engagement does not constitute advice and that the consumer should consult an actual financial advisor about the appropriateness of the sales recommendation.

The benefit of such an approach is that it would allow insurance companies and brokerage firms to continue acting in a purely sales function, without meeting the additional regulatory burdens of being a fiduciary advisor. Which would also help the DoL defend against the court challenges it faced with its last fiduciary rule – struck down when the courts agreed that the fiduciary standard should only apply to advisors, and not to salespeople who are not in a "relationship of trust and confidence" with their clients. All of which helps to preserve the regulatory distinction between sales and advice, and also continues to allow retirement investors the opportunity to choose between sales and advice (according to their own needs).

The key point is that even though regulatory bodies have recognized the distinct nature of advice relationships of trust and confidence and applied higher standards of care for such advice relationships in the past, the line between sales and advice has blurred in more recent years. The DoL could help clarify the distinction with a more "truth-in-advertising" approach, by requiring those who market themselves as advisors acting in a position of trust and confidence to retirement investors to be accountable to the fiduciary standards that go along with it, while also providing a path for those who wish to avoid the burdens of fiduciary status to avoid it… by being clear that they really are not advisors, and are simply acting in a sales capacity, so the consumer is clear about the true scope of the relationship.

#FA Success Ep 372: Quadrupling Revenue By Restructuring Your Business Model To Reflect Your Entire Value To Clients, With Melody Townsend

February 13, 2024 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Melody Townsend Podcast Featured Image FAS

Welcome back to the 372nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Melody Townsend. Melody is the president of Townsend Financial Planning, an RIA based in Lexington, KY, that oversees $112 million in assets under management for 160 client households.

What's unique about Melody, though, is how after her first decade in practice, she quadrupled her revenue in the subsequent 2 years by restructuring her business model from standalone hourly engagements and project planning fees to a more holistic wealth management offering that combined investment management and financial planning for a single AUM fee… which both better reflected the full value she was providing clients, and enabled her to truly scale her firm and hire up so it was no longer solely dependent on her alone.

In this episode, we talk in-depth about how although Melody initially built an hourly, fee-only firm for its ability to serve the middle market in Kentucky where she was based, she found that while it provided a lot of flexibility, there were limitations to the growth and scalability the model offered when you're also responsible for all of the back-office tasks in addition to trying to generate enough billable hours, how Melody also realized that the hourly model had led her to undercharge by not billing for all the time she was spending servicing clients and decided to take a big leap to right-size her prices by wrapping them into an AUM fee for those clients she was helping with implementation, and how Melody found despite her fears about losing clients in the face of a fee change that would on average double her client fees, in practice even her clients knew that she was undercharging, to the point that almost every single one stayed and many even consolidated more assets with Melody once she was actually able to manage (and bill on) them.

We also talk about how Melody invested early, at least relative to her revenue and profits, in business coaches and her own employees in order to sustain the service model that would meet her own standards, why Melody decided to hire with a focus on character over technical skills, reasoning that while she could teach paraplanning work, she couldn't teach integrity and work ethic, and now has several house-trained CFPs working in her firm, and how Melody leveraged the lack of Certified Financial Planner professionals available in Kentucky as a method of her own branding and let organizations like NAPFA and FeeOnlyNetwork send prospective clients to her door, rather than spending time in sales that she didn't enjoy anyway.

And be certain to listen to the end, where Melody shares how she struggled initially with delegating because it was hard for her to articulate in words what he just 'knew' in her own brain about how clients should be served, how as Melody has grown her revenue and hired more people, the book "Lead From Any Seat" which advocates that teams treat the boss as a 'customer' of the employees both transformed how she shaped her communication with her team for the better, and empowered her employees to take full accountability for their work, and how Melody's career and business decisions came not as a steady path of growth but a series of epiphanies about her own worth and value led her down new avenues that she had never envisioned when first embarking on entrepreneurship as a 20-something advisor nearly two decades ago.

So whether you're interested in hearing about how Melody calculated her project-based work to make it 1 size fits all (and shortened her onboarding process in the meantime), how Melody remained relentlessly centered on finding her ideal clients, even in the early years, and how Melody uses her firm's core values to filter through both her strategic business and team-building decisions, then we hope you enjoy this episode of the Financial Advisor Success Podcast.

The Importance Of Employee Appreciation (Going Beyond Just Recognition) For Advisory Team Satisfaction And Retention

February 12, 2024 07:02 am 0 Comments CATEGORY: Practice Management

While there is a plethora of ways that financial advisory firm owners can build and run their practices (from service models to specialties to fee structures and beyond), one of the most complex activities shared by many growing firms are those that involve hiring, training, managing, and retaining employees. And with the increasing shift to remote and hybrid work in recent years, these skills have become even more important. The reality is that advisory firms that help their employees thrive in these shifting work models will more likely be the ones to attract and retain top talent. In a world where less than a quarter of all employees are estimated to be actively engaged in their work, there is one simple yet highly effective strategy that can dramatically improve both employee satisfaction and business results.

In this guest post, Paul White, co-author of "The 5 Languages of Appreciation in the Workplace", shares how firm owners can reap tangible benefits by fostering a culture of authentic appreciation, because having employees who feel they are genuinely valued and appreciated will inevitably lead to higher productivity, lower turnover, and higher client (and employee!) satisfaction ratings.

To set the stage, it's essential to understand what workplace appreciation is and how it's materially different from employee recognition. As while recognition programs typically aim to incentivize desired employee behavior (e.g., by public acknowledgment of positive employee actions), they are often 'one-size-fits-all' efforts that may seem impersonal and contrived. In contrast, genuine appreciation is expressed in a way that is personally meaningful to each recipient and focuses on the contributions that individuals make within the organization... even when they aren't top performers. Moreover, unlike recognition programs, appreciation doesn't necessarily take a top-down approach driven by the firm's hierarchical' org chart' but can instead originate (oftentimes preferably) from colleagues as well as superiors.

Genuine appreciation is inherently personal, and not everyone values appreciation in the same way. Accordingly, advisory firms can use a framework to show appreciation based on 5 different 'languages' as discussed in "The 5 Languages of Appreciation In The Workplace" by Gary Chapman and Paul White (based on Gary Chapman's earlier book, "The 5 Love Languages"). For instance, while Words of Affirmation, the most commonly preferred form of appreciation in the workplace, are characterized by positive and encouraging words, Quality Time generally involves meaningful one-on-one time spent with a valued colleague or leader or just simply spending time together in a non-work setting. Acts of Service can involve lending a hand or even dropping off a snack when a colleague is swamped, and Tangible Gifts are personalized offerings that make the receiver feel special. As the 5th language, Appropriate Physical Touch (e.g., a high five, fist bump, or even a literal pat on the back) doesn't often have a foundational role in most work-based relationships, yet using it to communicate encouragement and appreciation can be valued by some employees. It is crucial to emphasize, though, that the acceptability of interactions involving physical touch is always contingent upon the comfort and consent of the person being touched.

Ultimately, the key point is that advisory firms with team members who feel that they are genuinely valued and appreciated are in a much better position to be successful and to provide outstanding service to their clients. Learning how to express authentic appreciation intentionally, in ways that are meaningful to each individual, is not only the right thing to do in and of itself, but will also help create a healthy workplace and improve a wide array of key performance metrics throughout the business!

Kitces & Carl Ep 131: What’s The Real Purpose Of (New Year’s) Goals And Finding The Next Best Action To Move Forward

February 8, 2024 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces & Carl Ep The Real Purpose Of (New Years) Goals And Finding The Next Best Action To Move Forward

When a new year comes around it is often customary to set new personal and professional goals. Yet, in the midst of the tradeoffs that come with balancing new goals and their required behaviors, the challenge of creating sensible targets with flexibility and grace can be confounded by the reality of living in a world where uncertainty abounds and complex life situations are difficult (and sometimes even impossible) to map out.

In our 131st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the value of setting goals even when our circumstances may seem overwhelmingly complex and uncertain (and even when we know that our goals will change); as doing so helps us clarify not only where we want to go and what we want to achieve, but also what our initial first steps need to be to get to the 'nearest local optimum' that will reveal new perspectives about our journey. Because developing these new perspectives, over time, are what often reveals the true direction we need to go to realize our most fulfilling success.

As a starting point, it's important to recognize the value of taking any initial step, as without that first step, getting past the myriad choices that face us can feel overwhelming and impossible. Furthermore, giving ourselves permission to shift gears and change goals instead of sticking to a rigid and unchanging blueprint for life can help us navigate and adapt to the complex environment that surrounds us. And by continually reassessing our roadmap as we take each step, we can course correct our path, adjust our goals as needed, and solve for the next nearest local optimum that we need to target to help us progress along our journey.

Accordingly, setting flexible goals and reassessing their relevance from time to time can help us make sense of the mystery that lies in the world around us while bringing clarity to the adjustments we need to make to stay on a path that continues to have meaning for us. As while setting goals can motivate people to take action to achieve the plans they make for themselves, the reality is that the sense of security that comes with having goals – which is often the source of the motivation it provides – can be based on a fleeting framework that is subject to change at any time. The question to ask ourselves as we reassess our goals, then, is if the steps we are taking continue to bring us closer to something we truly want, whether that involves improving the work we do and getting to what feels right for us, and/or aiming for better financial, emotional, or mental profits?

Ultimately, the point of having goals is to keep us moving in the right direction toward the growth and progress we want to achieve. When goals become too rigid, they can inhibit our momentum and keep us from recognizing the adjustments we need to make to stay true to our values and priorities as they inevitably change over time. Which means that keeping goals flexible and constantly assessing the steps needed to reach the finish line is crucial in crafting the most useful goals. And by following a path true to our values, continually assessing (and re-assessing) the direction we're moving, and adjusting the goals along the way, we can have confidence that the road we're traveling will continue to bring us closer to a meaningful and fulfilling future!