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It Is All About Perception: Live Beyond Your Own Business Limitations

Years ago a rookie financial adviser (me) new to the area asked a veteran colleague and friend, “What is the wealthiest street in the city of Milwaukee?”

“Well, that’s easy, it’s Lake Shore Drive because that is where all of the money and mansions are, however, I would not prospect them,” he told me. “They all already have an adviser.”

Many weeks later, the veteran stopped me as I rushed by him on the way out the door.

“Where are you going in such a hurry?” the veteran asked.

“I’m going to see my client at his home on Lake Shore Drive,” I replied.

T.S. Eliot said it best when he said, “Only those who will risk going too far can possibly find out how far one can go.”

Risk has many definitions. To my co-worker, it implied taking time to prospect an affluent niche that he believed would most certainly reject him. To me, the rookie, there was no risk in attempting to prospect them, since no attempt at all would absolutely result in failure.

My point today is that the reality of business risk is really about how our perceptions dictate what we believe is possible. The lesson learned should be: don’t limit yourself.

The following is a brief outline of how you can live beyond any business limitations you might have set up for yourself.

Identify Your Business Risk

It was a simple thought, “I’m not going to get rejected by people who don’t have money,” that led me down a path of forming my belief system around who I was going to prospect. In other words, I didn’t care about rejection, I cared about wasting time with unqualified prospects.

Unfortunately, it took some time to realize that although I was closing these new wealthy clients, they were only willing to invest a small portion of their assets with me; thus, my updated business risk was in not being confident enough to put together comprehensive financial plan, but merely pushing a product.

Model the Masters

Once you’ve identified any challenge, it’s important to look for the solutions. In this case, my solution came in the form of a conversation with my then branch manager who simply said, “You’ve got 500 accounts. You don’t need 500 more with the same average asset per account; what you need is a minimum account size. I recommend from this day forward that you never take an account under $100K.”

He was a former top producer turned branch manager and to me he walked on water. So, it didn’t take long before I picked up the phone and cold-called business owners inserting the phrase into my introduction, “I tend to work with business owners who have $100K or more in investable assets.”

Create a New Reality

Change can be a scary thing until you realize that not changing will cause you more risk. Take for instance what happened just 30 minutes after I started using the aforementioned phrase. The 30-plus year veteran business owner that I was speaking to replied, “I know what you mean, I don’t have time for small accounts either.”

And, just like that everything changed for me. I was no longer afraid to position myself as an adviser with a minimum account size. In fact, I embraced and was proud of it.

Become the Mentor

Now, as a business consultant/coach I’ve had the pleasure to help others break though the reality of their own business risk. Take Sandra P. a 30-year veteran client of mine who agreed to set her account minimums at $500K, then at $1 million and later at $3 million. It wasn’t until she gathered $10 million of new assets in one month that she realized how limited her thinking had previously been.

Why Having a System to Breakthrough Your Business Risk Works

The reason why having a system to break through your business risk works is because it helps you be aware of what those risks are, then by modeling your mentors it supports a paradigm shift of what is truly possible.

If you would like a complimentary coaching session with me, please email Melissa Denham, director of client servicing.

Dan Finley

Daniel C. Finley is the president and co-founder of Advisor Solutions, a business consulting and coaching service dedicated to helping advisers build a better business.

 

 

 

 

 


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Helping Clients Manage Life Transitions—With Credit Intact

Divorce, widowhood and other life events can be as much a financial hardship as an emotional one. Here are some strategies to help your clients minimize potentially negative impacts to a credit score after experiencing a life transition.

A question that often comes up when I speak with clients who are going through these situations is, “How can getting divorced or becoming widowed affect my credit score?” Not surprisingly, these life transitions can have a significant impact on a client’s financial well-being.

Transitioning from a two-person household to one requires making major lifestyle adjustments, and credit scores are often overlooked in the midst of this turmoil. To help a client avoid making hasty decisions that could affect their financial security, here are four strategies to help minimize the impact to their credit scores.

1.) Get organized.

Before you attempt to address the credit question, it is imperative to have a clear picture of a client’s current overall financial situation. Start by gathering documents related to financial obligations as well as insurance, taxes, retirement accounts, banking, investments and legal matters. Ideally, a client will have taken this step before the life transition event has occurred as part of their ongoing financial planning, but be prepared to perform at least some level of document gathering and organization.

2.) Make sure your client understands the importance of credit scores and credit reports.

Credit scores may take a hit during a life transition, typically due to a drop in income or an increase in expenses that are no longer being split with a spouse.

In some situations, creditworthiness may have been built under the name of only one spouse; in that case, your client may need to start building a credit history in order to meet the minimum standards required to establish a credit score. (The FICO scoring formula requires at least one recently-reported account opened more than six months ago.)

Additionally, lower credit scores may result in denied loan applications or having to pay high interest rates and extra fees—all of which can derail a client’s financial goals. Obtaining a current credit report is the best way to properly assess the situation. Remind clients that they can obtain one free credit report from each of the three major credit reporting bureaus (Experian, TransUnion and Equifax) every 12 months.

3.) Pay bills on time.

A third of one’s credit score is based on whether an individual pays bills on time, and all it takes is one missed payment to make a credit score drop. Work with your client to help ensure all their bills continue to be paid in a timely fashion. If an ex-spouse is responsible for a debt, it is beneficial to include an indemnity clause in the settlement, in the event of default.

4.) Make rational decisions about the family home.

Often, there will be an emotional attachment to the family home following a life transition. Your client may want to remain in it, particularly if there are children involved. While the sentimental aspect cannot be avoided, your role is to take the lead on having a rational, in-depth discussion on the practical considerations of maintaining ownership of a house or property. A mortgage is typically a client’s largest expense, and the decisions made on this front could affect his or her ability to make on-time payments.

Ultimately, creating a comprehensive plan for your client that includes a detailed discussion about credit will provide the necessary backdrop to build a solid plan for their financial future.

Let Us Help You with the Tough Conversations

Help clients turn a trying life event into an opportunity for a fresh start and financial empowerment with tips from the Knowledge Labs™ Women and Divorce and Women and Widowhood Adviser Meeting Guides.

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Marquette Payton, CDFA®, is an associate retirement director for the Defined Contribution and Wealth Advisor Services Team at Janus Henderson Investors. In this role, she works with financial advisers, Janus Henderson colleagues and clients to find solutions to today’s increasingly difficult retirement issues, whether within retirement plans or with individuals preparing for retirement. Payton also delivers women-specific content nationally to client audiences.  Prior to joining Janus in 2011, she worked as a manager at American Century Investments, where she led and coached a team that focused on consultative sales with retail clients. Ms. Payton received a bachelor of science degree in microbiology with a minor in chemistry from New Mexico State University, where she was recognized as a Crimson Scholar. She holds FINRA Series 7, 63 and 26 securities licenses and has 20 years of financial industry experience.

The information contained herein is for educational purposes only and should not be construed as financial, legal or tax advice. Circumstances may change over time so it may be appropriate to evaluate strategy with the assistance of a professional advisor. Federal and state laws and regulations are complex and subject to change. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of the information provided. Janus Henderson does not have information related to and does not review or verify particular financial or tax situations, and is not liable for use of, or any position taken in reliance on, such information. C-0519-23971 09-30-20


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Taking Action is THE Key Ingredient: 3 Steps to Start Now

Taking action is the single most important ingredient in obtaining your goals. Without sustainable and consistent action, goals are merely a wish list. One of the core elements is in understanding the value you place on the steps you need to take. If you perceive an action to be pleasurable, you will most certainly begin right away; however if you perceive an action to be painful, you most certainly will procrastinate.

Andrew Carnegie said it best, “There are two types of people who never achieve very much in their lifetimes. One is the person who won’t do what he or she is told to do, and the other is the person who does no more than he or she is told to do.”

To manage your level of activity, assign a “carrot,” or reward, for fulfilling action items and a “stick,” or punishment, for when you don’t. This process will inevitably change your value system and help you in remaining motivated.

Read on for a more detailed stepwise approach for how you can eliminate inaction and procrastination as it pertains to your business.

Step No. 1: Define the Value of the Task

Most advisers have a multitude of tasks that “should” get done every day. As previously stated, pleasurable tasks get done and typically are accomplished first while painful tasks either don’t get checked off or are delayed in getting accomplished. Unfortunately, this process neglects the fact that sometimes short-term pleasure can create long-term pain.

Ken is a 10-year veteran financial adviser who felt overwhelmed and exhausted most days. After a decade of prospecting, he found himself spending most of his time servicing clients when they called him. He did receive pleasure out of making his clients happy, which is why this had been a priority. As a result, the more arduous task of prospecting was neglected most days and his business growth had grown stagnant.

After a number of queries, Ken admitted that he hated getting rejected but realized the long-term result of not prospecting meant the pain of never becoming a top producer. So, we discussed the client servicing activities that he could delegate to his licensed assistant who was qualified to handle those activities. This resulted in freeing up time for him to prep and tackle prospecting.

Step No. 2: Schedule an Action Date

Typically, goals are much more likely to get accomplished when the tasks associated with them are assigned a time horizon, an action time and date. So, we mapped out Ken’s day to prospect first thing in the morning for 45 minutes. All client service activities that didn’t directly involve discussing investments with clients were to be delegated to his assistant while everything that was investment related but not time sensitive was to be done after his time blocked to prospect.

Step No. 3: Create Leverage

The easy part is in creating the process, but the harder part is sticking to it. In order to ensure that you continue to take action on a consistent basis you need to create leverage by assigning a reward system for accomplishing the activity or a punishment system for not doing the more difficult activity.

Ken was a coffee lover and to him the morning didn’t start until he had finished his first cup of coffee. After he told me this, I knew exactly what type of leverage he needed. He was to use coffee as his reward system, if he started prospecting, he could pour himself a cup of coffee, if not, he couldn’t. At the end of the day, he would send me an “accountability email” to share the day’s results. It took a few weeks of consistently prospecting and delegating to get into a groove but it did become easier and easier.

After a month or so of daily “accountability emails,” Ken’s prospecting paid off and his business started to grow again. In addition, he was feeling far less overwhelmed and excited about his outcomes.

Why Having a System for Scheduling Action Items Works

The reason why having a system for scheduling action items works is because it generates an awareness of what is important about the task, it sets aside dedicated time line for accomplishing it and then promotes keeping you accountable for the results. Oftentimes the simplest of solutions pays off in spades.

If you would like a complimentary coaching session with me, please email Melissa Denham, director of client servicing.

Dan Finley

Daniel C. Finley is the president and co-founder of Advisor Solutions, a business consulting and coaching service dedicated to helping advisers build a better business.