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Grooming Future Clients by Teaching Them Financial Literacy at Young Ages

If you want to build predicative relationships that produce income, referrals and loyalty, then start seeding your network and community with financial literacy resources and experiences for kids.

Yes. You can get current clients and groom future clients by helping to make it easy for others to teach children about money while kids are young.

By others I am referring to parents, grandparents, caretakers, teachers and community leaders.

By young, I mean kids 3, 4 and 5.

You want to give families every chance to optimize their success as a unit and as individuals. This means starting the financial education and compound growth processes early, when they have the most impact and can make the biggest difference. You want to shape habits and feelings—not correct them—if you are lucky enough to do so.

Let this be clear and plain for everyone to see. Let this be a testament to who you are. As Garrett Planning Network founder, Sheryl Garrett shared with me, it is simple. When you invest in kids’ financial education, it sends a strong message on exactly what you value and stand for. Championing youth financial literacy and making it easy to teach kids about money tangibly demonstrates leadership, long-term thinking and social responsibility. It shows concern for families. It signals you understand the constant pressures they confront daily when it comes to managing money, including addressing the “gimmes.”

Nothing could be more organic and authentic than financial service professionals helping address one of the most significant challenges of the 21st century: youth financial literacy. It’s a threat to kids’ futures and the stability of family life. Kids who grow up with poor money habits and money mindsets seem more likely to turn into adults with those same behaviors, attitudes and feelings. In my opinion, it is a horrific cycle to cultivate and perpetuate.

Kids Know More About Money Than You Think

Here are two things you may not know.

One, adult money habits and attitudes are set by age 7 according to a 2013 Cambridge University study.

Two, research from Ecole Normal Supérieure in Paris, France reveals infants understand more than many adults think.

You may or may not believe the research. I believe it. Why? I have led financial education programs and experiences for more than a quarter million children in eight countries and nearly 40 states. I have talked to kids and the people who teach them a lot about money. What I can share with you with one-hundred percent certainty is, young kids have ideas, feelings and associations related to money.

If you are a doubter, start asking the children in your lives about money. Generate your own firsthand data on the relationship they are developing with it. Find out for yourself what we are hardwiring into their heads and hearts about this essential topic.

Do not be fooled by whether they are able to articulate cogent explanations of personal finance concepts and terms. Stay alert to what they say, think and feel about the subject. Tune in to their habits and attitudes.

What you may conclude is this is exactly the time you can be of the greatest assistance to kids, parents, grandparents, teachers and community leaders. It is precisely when the wealth builder versus spender battle is being won and lost. It is the determinative and pivotal point when you want to sow the seeds of financial freedom and security into kids’ thoughts, feelings and behavior patterns.

Be that voice and source of resources. Impart that financial knowledge for kids and families. Have them associate those memories and mindsets with you.

Here are some tips on how to go about it.

  • Volunteer to read to kids. Read them storybooks with a personal finance lesson. You can do it at schools, after school programs, youth clubs, community agencies or in your office. And/or you can provide clients and community organizations with story books and other “incentives” that teach children about money. Naturally, two of our favorite storybooks are Sammy’s Big Dream and It’s a Habit, Sammy Rabbit!
  • Offer parenting workshops on a monthly or quarterly basis. You can do them live or online via a webinar.
  • Include a parenting tips column in a newsletter or a blog.
  • Write columns for local newspapers and online blogs.
  • Survey and quiz clients, prospects and community leaders on what they learned about money as children. And, do the same with respect to what they are passing on to the kids in their lives whether they be their own children, grandchildren, nieces, nephews, students, etc.

Advising Parents on Teaching Money Skills

What should you advise parents to teach young kids’ money?

Start with and stick to the basics—saving, earning, spending smart, giving wisely, investing regularly and tracking your money.

Stress saving. Here is why. Saving has multiple benefits. It’s a cornerstone upon which many other money and success skills can be taught. Saving teaches discipline, delayed gratification, preparedness, planning and goal-setting. Saving protects us from poor spending choices. Saving positions us to invest with less risk. Saving provides more freedom and choices. Saving builds confidence and character. I strongly agree with pioneering research scientist Thornton T. Munger who said:

“The habit of saving is itself an education; if fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought and so broadens the mind.”

In terms of how to teach, I strongly favor strategies that are interactive or participatory. Learning by doing is one of my favorite education strategies. Keep things simple and “sticky” if possible—in other words easy to remember. Here are a few ideas for your consideration.

  • Give kids short money slogans on the core topics cited above that they can say out loud, write out, color or decorate. For example, three of my favorites are: Saving money is a great habit; earning money is fun to do; and save and grow.
  • Read kids storybooks with a personal finance lesson. Have them repeat key messages and phrases out loud.
  • Have kids play store, practice shopping and making change.
  • Have kids write out grocery lists. Or have kids make check marks on grocery lists.
  • Have kids organize and stack coupons.
  • Play personal finance games with kids.
  • Have kids make their own personal savings jar.
  • Sing and color with kids. Sammy Rabbit has several toe-tapping tunes that are available for free on Spotify and YouTube like: “Get in the Habit,” “S-A-V-E,” and “Lemonade Stand.”

If you can help ensure kids master these topics you will have set them up for financial success in life. Those are the kinds of relationships and memories everyone values!

Sam Renick

Sam X. Renick is an award-winning financial educator, children’s author and songwriter. He is the driving force behind Sammy Rabbit and his Dream Big Read financial education strategy. You can learn more about Sam and Sammy at SammyRabbit.com.


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Best of 2018: Advisers: Recognize Your Walk-Away Moment

Editor’s note: This is the last of our top blog posts of 2018. Sometimes you have to fire a client. John Anderson of SEI Advisor Network gives our readers some tips on how to recognize that walk-away moment. A version of this post appeared on SEI’s blog Practically Speaking. You can find it here

In business—as in life—the lessons are often in the mistakes we make. But sometimes the better knowledge is seeing the mistake coming and avoiding it altogether. A routine exercise for business owners is the “what worked” and “what didn’t work” review of their practice. For many advisers, when considering the “didn’t work” part of the equation, the overriding theme is “I knew better but…”

Here are a few scenarios:

  • Adviser A: Had a client ask him to manage half of his assets, while the client self-managed the other half.
  • Adviser B: Built his practice with farmers and ranchers, then found himself working with two ultra-wealthy clients that were taking all his time.
  • Adviser C: Was amazed when he got a call from an $80 million lottery winner. He was managing only $35 million at the time.

Each of these advisers got to a point where either they were fired or they fired the client. On paper, or with the benefit of hindsight, it is easy to say they should have never taken on the client. But how do you prepare yourself if you’ve taken on a client who’s not a good fit? What can you do to identify your walk away moment?

Why Walk Away? Two Sides of a Bad Relationship

Each scenario was a challenge for the adviser who was involved—a challenge that upset their business. It is easy to see the adviser’s side of the bad relationship, what we often miss is the other side. The effects it has on the office:

1) Staff. The staff has to deal with major interruptions that an ill-fitting client brings to the table. Requests that are outside of normal process and procedures take time to learn and process. It drags down efficiency and because it is new, opens up potential for mistakes

2) Marketing and client relationship management. Time spent on ill-fitting clients takes away from marketing and new client acquisition for many advisers. What could the adviser be doing better with his/her time?

3) Revenue. For the adviser who lives in an AUM world, we know that with planning, onboarding, etc., the revenue earned is backloaded over time. In other words, the time you spend upfront with a client is earned back over the years from the advisory fees. A short-term relationship typically does not pay for itself

Avoiding in the First Place

One of the challenges for most advisers is to understand their target. I have often written that creating a persona or an avatar of your ideal client as the way to specialize your practice, and to focus on a niche. Some advisers however, are not ready for that level of specialization and a few may not go that deep. No matter where you come down on identifying the ideal client, I think it always starts with a few things:

  • What is the target? Simply stated, in the broadest terms possible, everyone in the “class” of people that you want to work with. The class could be the type of business that you find most interesting such as legacy planning or income planning or it could be retirees in general etc.
  • What is the ideal? Again, in broadest terms, what do they value or what will they value from your relationship?
  • What is the deal breaker? What will they not value, or what would cause you to walk away?

Note: Each of these is a subset of the others. The “deal breaker” is a subset of your ideal clients; the ideal clients are a subset of the target. Knowing the deal breaker before they walk in the door makes it easy to say no, or to direct them to someone else that can fit their needs.

What Happened Next

The client fired Adviser A (above) after a year. The client’s reasoning, “I know you outperformed me but I just can’t give up managing my own assets. I guess I’m not much of a delegator.” All of Adviser A’s pre-work, planning and effort was wasted.

Adviser B terminated his relationship with the ultra-high-net-worth clients. He found them a home with another adviser that had a more investment-focused service model. The staff was thrilled to go back to their type of clients—ones who appreciated planning and were less demanding.

Adviser C could not compete with the constant second-guessing by competitors and family members trying to get a foothold into the $80 million lottery winner’s life. Every waking moment was spent defending and babysitting the assets and the client. He gladly went back to his recently ignored book right after the new client fired him.

We all know when something does not feel right. Maybe we should be prepared beforehand, in writing, so we are more prepared to walk away when it doesn’t.

John Anderson

John Anderson is the managing director of Practice Management Solutions for the SEI Advisor Network. He is responsible for all programs focused on helping financial advisers grow their businesses, create efficiencies in their operations and differentiate their practices. He is also the author of SEI’s practice management blog, Practically Speaking.


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Best of 2018: Things You Shouldn’t Say to Grieving Clients

Editor’s note: Until the end of the year we will be publishing the top blog posts of 2018. This post is about what not to say to your grieving clients, which I wrote shortly after my dad passed away in July and I witnessed how our parents’ financial adviser was a shining example of how to interact with a client’s family after a death. 

The unthinkable happened this year.

My dad died.

We’re still living this nightmare that started when he got sick. Oftentimes, kind‐hearted well‐wishers unknowingly make it worse with the things they say, but my parents’ financial adviser is not one of those people.

I remember Mr. Vincent Rogers since I was a little girl. I was frightened of him for a long time simply because when my parents took out life insurance policies on us when I was 9, I was terrified to have blood drawn and I blamed Rogers for my fear.

Rogers was not just a financial adviser, he was also a friend to my dad, as he relayed to me when he paid his respects at my dad’s funeral.

“Do you remember me?” he asked.

“Of course,” I responded before thanking him for joining our family to celebrate our dad’s life.

“Your dad was my great friend,” he told me.

He relayed a story about how when he was a young newlywed, my dad made his wife (who was from Colombia and at the time spoke limited English) feel comfortable because he spoke in Spanish to her. Oftentimes, Rogers said, my dad and he had philosophical conversations about life and marriage. He told me that he will miss my dad—and I could tell he meant it.

There is one guarantee in this life and that is death. Given that fact, there is a very high chance that your clients are going to experience the loss of a loved one in the course of your working with them.

A time of loss is also a time of heightened sensitivity. Understandably, it’s stressful to approach a grieving person for fear of saying the wrong thing. Death in a family can cause your clients to cut out their own family members, and if you say something offensive to them, they just might cut you out too.

Clients might hold you to a higher standard when it comes to communication skills, and especially during a time of loss. Avoid being offensive by steering clear of the following phrases:

“I can’t even imagine.” Andrea Raynor, hospice chaplain, writes in her book The Alphabet of Grief: Words to Help in Times of Sorrow, that this is one of the more hurtful things to say to clients who are grieving. She said that this is like telling your client that their situation is so horrifying that you can’t even picture yourself going through it.

“I know how you feel.” None of us know how each other feels, really, and especially not during a time of loss. We’ve all lost someone, so if you are trying to say you know how they feel because you too have lost someone, then tell them the specific story while also clarifying that you understand that we all grieve and feel differently.

A friend, who’d also lost her father not too long ago, reached out and instead of saying, “I know how you feel,” she shared a specific story of how she has coped with losing her dad.

“It gets better when you realize he’s always with you,” she told me. This has been incredibly comforting, and I think of it every day.

“I’m so sorry.” Amy Florian told the Wall Street Journal that your clients will likely hear this phrase thousands of times and it will likely not have any impact by the time you say it. She’s right. This phrase could open the door to a negative situation, also, Florian noted, like the client responding with “Not half as sorry as I am.” Instead, she adds, share a memory of their loved one if you knew them, the way Rogers did with me.

“Everything happens for a reason.” This is another one best avoided, David Kessler, author and lecturer on death and dying, told the Wall Street Journal.

“When you’re in deep grief, you don’t care about any reasons,” he said in the article titled, “What Not to Say to a Grieving Client.”

He advises to simply let your client talk. Allow for extra time for your meeting with them with the expectation that they’ll need more time to tell their story.

These are the four phrases that have been triggers for me, and upon further research I found them on several lists of what not to say to clients who are grieving. Simply avoid these phrases altogether, opting for an authentic, heartfelt story of your clients’ loved one. You’re not going to make them feel better, but you could avoid making them feel worse.

One last bit of advice: check in on your clients. They’re probably not OK one month, two months, even a year after their loved one’s death. You reaching out just to see how they are will mean the world to them.

Ana TL Headshot_Cropped

Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.