The Entrepreneurial Financial Advisor

Do you know why you entered the business of financial services?  I believe most of us didn’t enter this amazing business purely to accumulate sales awards, win product competitions, or to focus on “closing funnels”.  You, nor I, would ever advise our clients that they should enter into any field with an ability to build and grow a business with no guarantee that next year’s income will be similar to the current year because you will start fresh in January every year on the commission “gerbil wheel.” My belief deep down is that most of us, who are or will become, the great financial advisors our clients so desperately need and want, entered this business to be and become true advisors, financial caregivers, entrepreneurs, or business owners; not sales people.

Production Culture

Production cultures immediately focus the financial advisor’s most valuable resources – time and energy – on techniques and systems that have little to do with building a business and are not sustainable as a business model by that advisor.  Sales and marketing techniques include product focused advice; how to create fear using questions that identify the prospect’s “hot buttons,” and event driven product pushing to handle client concerns or changes in the news.  The firms focus their attention on sales goals and payouts that grow with certain product placement. Most new advisors flame out trying to keep up with the wrong things instead of learning the ways of the entrepreneurial business minded financial advisor.

As you will begin to see, the real problem in developing yourself as an entrepreneurial financial advisor is instead of training you to run a business based on the core issues that every client you ever meet will have, emotional or behavioral conflicts- the industry seems to direct your focus more upon complex techniques based on an air of superior smarts and analytic solutions as if the client’s issues are of some intellectual nature. However, our client’s need a different kind of help, an advisor that manages the investor and their tendencies, biases, and their behaviors.

Build a Real Business

With a consistent and reoccurring model, you can afford to build a real business that actually operates with processes and procedures. Processes and procedures will ultimately help you grow and operate without utilizing all of your time and energy, thus making the business much more valuable and elegant! I would challenge you to start thinking about transitioning to owning and operating a fee-only financial planning business. As we move to become behavior managers and business owners instead of product sales people I would like to leave you with a quote from one of my mentors and a great teacher to our industry, Nick Murray.  In his book, Behavioral Investment Counseling, he says:

“The advisor who attempts to resolve this problem through heightened intellectual effort aimed at improving portfolio returns is doomed.  The wise advisor will address the central behavioral problem by offering his decisive abilities as a behavioral coach.”

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