We have hit rock bottom.
The financial industry is experiencing the lowest level of trust it’s seen. Actually, we have been there for several years. Even after the scores rose somewhat in 2014, the industry is still facing a deep lack of trust – worse than any other industry. In a survey conducted by Edelman, participants in the top 25 percent of household income have spoken – our largest target market does not trust us.
So what do we do? We can’t ignore the stats anymore. We can’t keep shifting blame onto financial crises from a decade ago. In Free Throws for Financial Professionals, I talk about a few things for planners to keep in mind:
During his tenure as coach for IU Basketball, Coach Knight won 902 games, three national championships, multiple conference titles, a National Invitational tournament, and an Olympic gold medal – and 98 percent of his players graduated. Coach didn’t just want good players – he knew basketball would be a temporary part of these kid’s lives, and they’d need a plan for afterwards.
What would our clients’ lives look like if we focused on them as much as Coach focused on the holistic outcome? Too often, we are looking to capture assets under management or make a sale. We need to get back to basics and focus on the outcome – getting the client to their goal of a sustainable income during retirement.
In the 1987 national championships, Daryl Thomas could have been made immortal: he could have made the winning shot. But he would have had to make a jump shot against good blockers to do it. As a freshman, he may have forced up a shot. But, with experience he knew what his strengths were. Instead, he did the smart thing. He passed to Keith Smart, who got the winning score.
As we witness the largest shift in the workforce in American history, we have to take stock of our own weaknesses and biases toward products that mitigate longevity. Or, we have to surround ourselves with other professionals who can view the income portfolio with a different set of eyes. Either way, we must increase our knowledge base of longevity-related risks as the population continues to age and needs income for longer periods of time.
Prepare to Win
“Everyone has a will to win; few have a will to prepare to win.” - Coach Knight
Coach took copious notes during each practice. Managers filmed every moment and took down stats regarding each specific offensive set we ran. We’d look at the numbers and ask “why?” It took looking at the film to see why we were having success against one defense versus another.
In our business, we must ask why more often. There’s a lot of talk about being a fiduciary and setting standards. We can meet those standards by asking simple questions focused on the client, then shift the current standards to focus on the client. Not practices. Not disclosures, fees or conflict of interest. The client. We must understand our clients as well as Coach understood his players – their strengths, their weaknesses and other team’s qualities.
If we don’t change, we’ll continue to be at the bottom. So how do we improve trust? It doesn’t come down to simple regulation. Instead, it’s about changing our behaviors toward clients and our techniques that demonstrate a total focus on the client. Think about how you can work with integrity, play to your strengths and maintain curiosity on how we improve the client’s situation. That will build trust faster than any regulation.
Winning Strategy: Build trust with a focus on the other person. Do what is best for them and our industry will gain respect.
About the Author
Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.
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