A couple of weeks ago, I was talking with my business coach, CJ McClanahan, and he said something that struck me: “People don’t have a vision for what the effort is going to deliver.” If you think about that statement, it applies to several parts of our lives as financial planners.
In today’s increasing regulatory environment, we tend to focus our attention on fighting the U.S. Department of Labor rule. In practice, the rule has already taken effect as clients are already asking planners if they are fiduciaries. For the last nine months, banks and wire houses have been converting their clients, for better or worse, to fee-based accounts. And, as I travel around the country, I hear too many people talking about what they are going to do to fight the rule, rather than what they are going to do to implement the rule in their practice.
The rule will undoubtedly require a lot of effort to fully implement. However, our clients are likely to benefit from the changes that the rule suggests. Putting our clients’ best interests first has always been a part of our ethical makeup. However, the documentation needed to prove this status will require changing how we process our client files, complete our paperwork, and follow our sales process.
That said, we tend to lack the vision of what our businesses may be like when we implement the rule. Your clients will likely have more trust in you. They will likely discuss more concerns with you. And, they will be more likely to refer you to other like-minded prospects. Those items can make your business more profitable and more efficient.
At the same time, our clients lack vision in the financial planning process. Most clients spend more time planning this year’s vacation than they do planning their retirement. We have to do a better job of providing that vision, through education that motivates them to complete the planning process.
Without a doubt, the planning process can be onerous if done properly. Planning should consider the risks of retirement, including longevity, legacy and charitable desires, taxes, and health care, to mention a few. Each of those risks needs special consideration, evaluation, and analysis to prepare a proper recommendation for each client’s concerns, goals, and objectives.
Few people rarely want to think about those risks, let alone plan for them or act upon them. It’s our job as financial professionals to create a positive vision of the outcomes for our clients: sustainable retirement income, better lifestyle management, and more time with children and grandchildren.
In the end, vision becomes an important part of the planning process and of our business models. We must keep the vision of all the changes in perspective, but we must also envision the benefits of change. In doing so, we can easily put forth the efforts needed today for a better business and happier client relationships.
Few people maintain the vision of all the effort that change requires in order to improve. That applies to clients and planners. Take time to think about where your clients need to be in the future and where your business needs to be in three to five years. Keep that vision in the front of your mind for proper motivation to change.
Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”
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