ADVICE FIRST

It is easy to villainize product sales in an industry where sales have historically been given more priority than planning and advice.  But, for the most part, it's the tactics not the product that are the issue.  

If you were taught fear-based selling, overcoming objections and hard sales tactics, you know what I mean.   

It's easy to develop such an aversion to "sales" that you throw "product" out with the bathwater.  Like so many things, it's a matter of extremes.   

When the pendulum swings to aggressive sales tactics, we need more advice.  But what happens when the pendulum swings so far to the advice side of the equation that important product implementation is left behind?  

I have been guilty of this!  After leaving a firm that made every advisor a closet whole life insurance salesman, I wanted nothing to do with insurance.  It was dirty.  It paid too much, causing a conflict of interest.   Advice felt good.  Advice felt above the fray.   

Advice made me feel proud to be a financial advisor again.  

The only issue is that clients actually need financial products.  And just because I was able to wash the product sales stink off of me, doesn't mean that other "advisors" aren't using the same tactics I was taught. 

This creates a conundrum.  We can be advice only.  Or do advice and asset management and feel like we are keeping our hands clean.  But the client is still potentially going to have to find product solutions for life insurance, disability, long-term care, annuities.    Good advice and asset management don't cure all ills.  Clients need more.  

If you don't offer these products, how will they get what they need?  By going to someone who is probably far less interested in their holistic financial life than you are.  

Some advisors will say, but I will recommend what they need and they can go to an order taker insurance agent.  The thing is that insurance products are very complex and the marketplace is always changing.  If we don't stay plugged in, our advice will be rudimentary and the client is still at risk of being "sold" something that might not align with their overall needs.   

And let's talk about implementation.  Are your clients phenomenal at implementing everything you recommend?  (insert eye roll here).  If they are like most, your clients need to be poked, prodded and reminded to get things done.  And when they don't fully understand it and when you aren't helping them, their resistance to implementation goes even deeper. 

Offering insurance products within your practice significantly raises the likelihood that a client will end up with the right product and will actually implement that advice.   

I am sorry to say that if we are serious about helping our clients live more secure and free lives through comprehensive financial planning, we need to be intimately involved in product sales.  

I am often asked if I will someday start or join an RIA, as that is considered the more client-centric business model in our industry.  I won't pretend to be an expert on RIAs, but when I have researched it, it seems inadequate to meet my client's needs. 

Clients need more than just advice and asset management.   The majority of RIAs are actually just asset gatherers.  You can't convince me that that business model is any more de-conflicted than any other sales firm.  You just happen to be focused solely on asset management, possibly to the detriment of the client. 

My Advice-based Financial Planning process evolved out of what I deemed to be the shortfalls of product-focused and advice-only business models.  

Clients need de-conflicted advice.  They need full implementation support and, virtually all of them, need some sort of investment or insurance product. 

Advice-based Financial Planning is a comprehensive financial planning relationship that is not contingent upon the sale of any product and supports full implementation of the plan. 

It is advice first and product as needed.  It can operate as an advice-only model for those clients who are best served that way.  But for most clients it is a truly comprehensive relationship that starts with advice and supports the full implementation of that advice whether that be behavioral coaching or product implementation. 

Our industry has an ugly history of exploitation.  Many of us want to usher in an new era of true client advocacy and elevate our work to a profession that we can be proud of.  We have to be thoughtful in that evolution that we don't choose what serves us best and ignore the true needs of the client. 

With purpose, 

-Lucila  

If you want to learn more about designing an Advice-based Financial Planning practice, you may be interested in our Delivering on the Promise Online course or private coaching. 

In this curriculum, I share with you the processes I developed to build a profitable, purpose-driven practices.  It is based on my personal experience and it is designed to be turn-key or customizable, based on where you are in your evolution and branding.   

Learn more by visiting our COURSES and COACHING pages on the website.  And always feel free to email me at [email protected] if you have any questions!