Every financial advisor understands the power of strong communication skills. From being able to pick up on non-verbal cues to ensuring clients feel "heard” in a conversation, effective communication skills are the bedrock of a strong client relationship.   Believe it or not, not everyone – including the advisor population - is a “natural communicator.” In fact, I have found that the strongest communicators in our space learned and developed specific skills over time through conscious practice.   So, where does one start on their journey to becoming an extraordinary communicator? The answer is by listening. While this may seem simple and obvious, most people are surprisingly poor listeners – which is why it is so important to develop a skill called “active listening”.  What is Active Listening?  Active listening is a way of intentionally engaging during conversation to build a deeper understanding of the person you are speaking to. The Harvard Review of Business cites three key components:  Cognitive: Paying close attention to all information being conveyed, both explicit and implicit, and integrating that information into your understanding of the person.  Emotional: Monitoring and regulating your emotions during the interaction to stay attuned to the person, rather than succumbing to emotional reactions such as irritation or boredom.   Behavioral: Showing that you are engaged with the person through visual and verbal cues, such as nodding or mirroring their body language.  What Does Active Listening Achieve?  The combination of these three factors is extraordinarily powerful. Active listening can:  Produce positive feelings: fMRI studies show that active listening activates the brain’s reward system and produces positive emotions. In other words, you can literally make someone feel good simply by showing them you are listening to them.  Increase understanding: Concerted attention ensures you take note of important information other advisors might miss. It’s these tiny details that will shape and inform your responses and reactions, completely changing the trajectory of the conversation and relationship.   Increase engagement: Active listening helps advisors “anchor” themselves in conversations with clients, helping them show curiosity and use that curiosity to propel the conversation forward.  Active listening is the lowest-hanging fruit as it relates to creating a rewarding client experience.  When done right, it requires little effort but produces tremendous value.  Here are four ways in which you can powerfully leverage active listening skills in your routine interactions with clients.   Four Ways Active Listening Can Help Advisors Improve the Client Experience 1. Identify Client’s Belief Systems   Roughly 90% of financial decisions are based on emotions, and those emotions are dictated by a set of underlying beliefs. In practice, that means advisors need to understand their clients’ belief systems and worldview – which is something active listening can help you achieve.   Let’s assume an exaggerated example. Imagine you are working with a couple, where the male spouse believes that he should be the sole financial-decision maker since he is the bread winner in the family.  This could have a wide range of implications, influencing how your client interacts with you and how he engages in the financial planning process. Awareness of this fact can help you facilitate and steer conversations, so that you are “balancing” the power between the more and less dominant spouses, resulting in outcomes that benefit the entire family.   After a client meeting, it is important for advisors to create a space to reflect on what they have learned about the client.  The Cheat Sheet After each meeting, ask yourself these three questions:  What have I observed about this client that is worth remembering for the next conversion?  What am I noticing about the dynamic between spouses? OR What am I noticing about specific language or phrases the client uses?  What do I need to be mindful of when asking questions?  Be sure to store the answers in your CRM – they will help you recall these belief systems and factor them into future engagements.  2. Influence Behavior  Many advisors wish they could take on a more “powerful” role during client meetings but may fear creating a negative atmosphere. However, active listening skills help you attune to your clients’ emotions – which enables you to assert power when appropriate whilst remaining connected.   During the planning process, advisors have a chance to help clients recognize and shed belief systems hindering their progress and success. This is one of the most powerful roles an advisor can play.  There are so many examples that can be found when working with couples specifically.  Perhaps one partner is extremely dismissive of the other, resulting in frequent arguing and a misalignment around goals and decisions. One way to handle this is to listen intently and then (only after you’ve built enough rapport with both parties) ask permission to share objective feedback about what you have witnessed.  Be sure to not appear as if you are “taking sides” but rather provide objective feedback on what you’ve heard and then guidance on how both parties can meet in the middle.   3. Recognize and Support Clients  More than 50% of Americans are more trusting of advisors who show they care about their clients as people.1 While active listening has been shown to intrinsically make people feel valued, it also enables advisors to demonstrate their care through action.  One example would be addressing negative self-talk. Many clients exhibit patterns of behavior or speech that suggest they feel bad about themselves or their ability to manage money. However, advisors who pick up on these instances can uplift their clients and help them be less hard on themselves – ultimately building a stronger bond.   The best way to do this is to help the clients set goals, including small, short-term goals that are easily achievable. If you help the client stay accountable to those goals and then reinforce and celebrate their success when they achieve them, you will build their confidence and deepen their trust and loyalty.  4. Stay Engaged  Every advisor struggles to stay engaged 100% of the time during long client meetings. Oftentimes when we’re tired, bored or burnt out it can also be challenging to empathize with what the client is saying.  But your client deserves your full attention and care – which is one reason active listening is so important.  Through active listening you can facilitate a technique I call “manufactured empathy”. When your mind begins to wander, lean into your curiosity. Recall a specific detail the client asked and ask an open-ended (“what” or “how”) question.  Keep being curious, using what the client is saying to help formulate your next question. This can help anchor you into the conversation, re-engaging your mind and making the client feel heard and listened to.   The net result is the client feels good leaving the conversation. Think about how many times you’d have a conversation with someone, where they talked a lot and you talked very little, but they thanked you profusely for the “great” meeting.  THAT is the power of active listening.   Take Your Communication to the Next Level  Financial advisors who develop their active listening skills see significant improvements in both client retention and referrals. But it is just one tool advisors can leverage to deliver a better client experience.   Our Communication Toolkit offers a range of powerful questions to communicate more effectively at each phase of the client journey. It condenses more than a decade’s experience into a practical guide you can refer to whenever you need to build stronger connections with your clients.  

By Tobias Salinger | August 22, 2024 1:39 PMclick here to read the full article

How many times have we heard that advisors aren’t growing? Year in and year out we hear the stats about the lack of organic growth in the industry. We’re told that most advisors aren’t bringing on new clients with any kind of velocity or consistency; instead, they’re growing AUM by virtue of rising markets, or leveraging M&A strategies to drive inorganic growth. While the numbers certainly don’t lie when you’re looking at the industry as a whole, my perspective is skewed. I spend almost all of my time with advisors who, like me, are students of the industry with a deep passion for practice management. These advisors are committed to working on themselves and are obsessed with getting better for the sake of their clients. They are ever evolving as practitioners, with total conviction over their value propositions. It’s no surprise then that these advisors are in fact growing. And by a lot. Unlike the rest of the industry they are wildly successful at sustainable organic growth, acquiring new clients year over year without sacrificing experience or retention. The Four Key Organic Growth Characteristics So what makes these advisors different then the rest? I’ve worked with thousands of advisors, and I’ve found that there are five key characteristics that separate those who are organically growing from those who aren’t. 1. They spend the majority of their time on business development. I know this one seems obvious. But there is something unique here about how they manage to find time to do this that is worth noting. These advisors don’t typically find themselves “stuck” in non-revenue producing roles for an extended period of time. The minute they start to feel like their capacity is filling up or they’re spending too much time on operational tasks, they make a change. They hire talent, even if it means reducing their cash flow. They delegate and outsource, even if they know that the work won’t get done “as good as they would do it.” They adjust their business model - leave their back office, merge with another firm, raise capital  - no matter how painful or daunting the notion of “change” seems at the time. The fastest growing advisors are not dealing with custodians or compliance, processing paperwork, managing payroll, fixing the tech, negotiating with vendors, inputting data.  The list goes on and on. My point is: if you follow the pattern of business decisions made by the leaders of growing practices, you’ll find that those leaders are comfortable making (temporarily) uncomfortable or hard decisions. I’ve witnessed this firsthand at Journey. Advisors typically join us after realizing they are at a critical crossroads and need to make a change so that they can have the role, practice, life and future they want. So, how do you become someone who is comfortable being uncomfortable? The first step is being honest with yourself about what you really want, and who you want to be in the business. These are the two most important questions you could ever ask yourself as the leader of the practice.  You cannot simultaneously grow the practice, run the practice, manage the team and operations, and serve as an advisor to all your clients. Realistically, you could probably do one and a half of those well. And if growing the brand and bringing in new relationships is your strong suit, then all of your efforts (and business decisions) need to be shifted towards giving you more space and time to do that. On the flip side, if you hate the idea of being responsible for revenue growth, then you’ll either need to fill that gap by hiring someone to lead your growth efforts, or by joining forces with others who can alleviate the pressure. Either way, having conviction in what you want, and what you are willing to do and/or give up, is key to establishing your business development strategy. 2.  Business development isn’t a job, it is the fabric of their persona. If you talk to advisors who are consistently growing, they don’t think about business development as “sales.” They’re never afraid that they’re appearing salesy.. They don’t shy away from making a call to action. They follow up with prospects and check in with COIs.  They talk about the business and ask for the business, unafraid and unashamed. Why? Because they believe so deeply in their own value proposition that they feel it is their duty and obligation, as a steward of this profession, to tell more people about what they do. I call this the “relentless prospector” mindset. Think of it this way. Instead of dreading following up with a prospect, imagine feeling “excited” at the opportunity to change someone’s life. That is what the relentless prospector feels. With this mindset comes an ease in which one can weave their value proposition into conversations. Relentless prospectors wear their brand like a badge of honor, and get great joy out of spreading the word about all the great work they are doing. If you’re reading this thinking, “This is so not me,” I have two pieces of advice. The first is to self reflect. Every successful person suffers from imposter syndrome at some point. But for the best in the business, the desire to be great, to help more people, to build the practice, supersede those moments in time.  If imposter syndrome or a lack of conviction are holding you back, it's important to explore where there is misalignment. I have seen SO many advisors subconsciously hold themselves back because they no longer felt aligned with the firm they were at, or because they felt they were in the wrong partnership. Focus on making the necessary adjustments, and the mindset will follow. Second, spend as much time as you can during the work week engaging in activities that increase dopamine. (There is a reason why I don’t believe advisors should spend any time on the phone with the custodial service center, or fixing a broken tech aggregation.) Call your favorite COI. Talk to your best clients. Talk to clients and business partners who you know will validate you and reinforce your value proposition. Connect with people who you have helped and share that positive feedback and praise with your team.  Use the momentum to build your confidence… and then immediately call or email the prospect or COI you’ve been procrastinating. 3. They deliver an exceptional client experience. You’d be hard pressed to find a growing practice that was just … mediocre. Top teams are exceptional at delivering client service and consistently delighting clients. Typically these teams are extraordinarily consistent across each department and role in the practice. Everyone in the practice speaks the same language. They describe the value proposition the same way and can easily articulate what makes them special. More importantly, everyone in the practice recognizes that their best use of time is to either create the capacity for business developers to bring in new clients, OR focus on delivering exceptional service that turns new clients into raving fans. The specifics of “exceptional client service” can vary from client base to client base, but the best advisors in the business all get these aspects right: They are proactive. They’re scheduling reviews before clients have to ask to meet. They’re uploading quarterly performance reports automatically to their client vaults.  They’re reaching out to “nervous nelly” clients when markets are skittish. They deliver across the value chain. They are not just managing an investment portfolio. They are helping clients answer questions about insurance, mortgages, tax savings, budgeting, goals, health insurance, etc. They know their stuff and have built a network of professionals around them who also know their stuff. They care deeply about their profession and continue to educate themselves about the topics that are relevant to clients, so that clients don’t have to wait days or weeks for an answer to a question. There is cohesion among all the staff. The client can expect a similar (great) experience no matter who they are dealing with at the firm – fast response times, clear pre- and post-meeting communications, and proactive ongoing updates around their financial plan and progress. Their value proposition manifests in their engagement with clients. This is arguably the most important point. The best in the business recognize that what they say has to align with what they do. Here is a great example: If you cannot very quickly and clearly articulate what your team does to deliver exceptional client service (or differentiated service), spend time working on this. From enhancing firm retention to driving referrals to evangelizing your brand and its reputation, your existing clients are central to sustainable organic growth. Treat them that way. 4.  The brand - and marketing - transcends beyond the individual rainmaker. I’ve spent a lot of time talking about the solopreneur advisor-rainmakers who sit at the center of the fastest-growing practices in the industry. While it’s true that these firms typically have at least one PERSON driving the brand forward in the marketplace, it’s also true that the brand transcends beyond that one person. This may seem like another obvious point, but it is impossible to grow a brand without making a long-term investment in marketing. I talk to so many advisors who have little patience as it relates to marketing initiatives, especially those related to social media. They’ll post a few ghost written posts on LinkedIn,  or make some adjustments to their website and immediately get frustrated. “Why isn’t my SEO better?” “Why don’t I have more “likes” on my comments? “Why aren’t any leads coming in through my site?”  These advisors typically are trying to do it themselves or have an administrative assistant moonlighting as their marketing person. As sales and relationship people, we are driven by instant gratification. The idea of waiting years to build a following seems… unnatural. And for many advisors, it literally is unnatural to go on social media and post personal updates about their lives and practices. (For the record, I totally understand the frustration with how long it takes to see results and how much of a waste it can feel like to spend $10, $20, $30k on marketing only to realize that all your new clients are still coming from your personal relationships and referrals.) The key for the best in the business, though, is that they understand that an investment in marketing is simply a necessity for the business. And that results need to be measured over the course of months and years, not days. Here is what I’ve seen these folks do well as it related to marketing: Find a marketing firm that will actually execute on their behalf. While it’s important to talk strategy, it’s also important to have professionals “doing the things” that advisors are not trained to do, nor should be spending their time doing (editing videos, writing blogs, creating graphics, etc.) Identify their “marketing edge” by correctly aligning what they want to produce with what their ideal consumer is looking for. If your clients are retired, LinkedIn isn’t where you should be posting (although you may find COIs there).  If your clients are Gen X female divorcees, posting generic financial planning tips probably won’t catch their attention. But creating customized, highly specific content – the top three financial moves to make immediately after a divorce, for example – will. They create authentic content in different formats, consistently and relentlessly.  It almost feels as if they are “following” the prospect along their life’s journey, day in and day out providing helpful tips and valuable information. They steer clear of the red shiny objects. No need to make a TikTok account or pay for a radio ad if your ideal clients are not consuming content on either of those media. They aren’t afraid to spend the money or the time. Statistics tell us firms spend anywhere from 2-10% of revenue on marketing.  As far as time, my rule of thumb is six months. Give an idea or new strategy a solid six months to see if you can get into a rhythm. They have realistic expectations with regard to both budget and timing. The more you’re willing to spend on marketing, the more opportunities you’ll have to get in front of your ideal clients, which translates to more qualified at-bats for an average lower cost. And while marketing can definitely produce short-term wins, it is by nature a long game. Implementing an SEO strategy, for example, might not yield measurable results for up to a year. It is also far more expensive than advisors realize. Think of marketing, good marketing, like your always-on brand evangelist. Once you get the engine running repeatably and sustainably, it’s going to keep working to drive growth for your firm. The Road to Organic Growth Starts Here So where do you start? I’d start with reflecting on what you’re prepared to do - or not do – in order to grow  practice. Allow your vision, even if it’s a short term vision, to guide you on your next steps. Next, I’d construct a game plan for creating enough capacity in the practice for you to be able to forge ahead.

Planning to leave your firm but worried about the process of transitioning?  You’re not alone.   60% of Advisors say they have put off their transition because they “fear of the unknown”, with concerns about client attrition and the scale of administrative duties making the process feel too challenging for many.  But it doesn’t have to be this way.  There are a series of proven steps you can take to make the process simpler and more successful – and this article reveals them all. Whether you are joining a new firm or starting your own, setting aside six months to organize your client data will enable you to hand in your notice with confidence – knowing that everything is in place for a seamless transition.  Six Steps to Prepare Your Client Data for Transition  1. Check Your Employment Agreement   The first step to transitioning is to extract client data, but first you need to have a lawyer check your employment agreement. Can you legally download copies of your client’s financial plans? Are you allowed to export client data from the CRM? And do you have to disclose what you’re doing?  There are two broad possibilities:  The best-case scenario: You have no obligations and can leave freely whenever you want. While you will still need to notify your current firm and agree on when your last day will be, there will typically not be any restrictions around what information you can take with you on the way out.   The worst-case scenario: You are contracted to take a 30-day “garden leave”, during which time you are not allowed to contact clients or ask them to join your new firm.   It is important to have plans in place for both the best and worst-case scenarios. This could save you a lot of legal trouble: if your firm owns the data and compliance notices you are illegally extracting information from the CRM, they could start monitoring your activity and ultimately prepare a nasty lawsuit.  2. Get Familiar with Your Tech Stack  The ideal outcome of your transition would be to seamlessly switch your client data into your new tech stack. But to make that a reality, you must become familiar with that tech stack and assess how the data will transfer – which can take some time.  We recommend you start by identifying the system you will be using – whether it’s proprietary tech from your new firm or a solution you chose for yourself. This will give you plenty of time to learn how it works and assess its interoperability with other software. However, even moving data within the same software can cause friction and not allow a complete transfer.    For example, let’s say you have a financial planning software license with your current firm and intend on using the same financial planning software at your new firm. Your current license might be owned by your current firm, or it might be a customized license that offers fewer features than a traditional license; you’ll want to check with each software vendor.    In some instances, the vendor will offer services, for a fee, to help you recreate each financial plan. As for portfolio management and reporting software, if you are moving to a new vendor, expect the process of retrieving or recreating all your old performance data to be clunky and in some cases, simply not worth the attempt.   Remember that the firm you are joining should be able to help you with these conversations and in many cases will also pick up the cost associated with transferring data.   You will need to ascertain:  What software you plan to keep or change  What data is and isn’t transferrable given your contract and the vendors you are dealing with  How and who will transfer the data to the new system  What support is available, if you are moving to a new firm or using a transitioning support service  When you will transfer data and how long it will take  This should all be stored in a checklist that enables you to plan and execute the transition as smoothly as possible.  3. Gather Your Spreadsheets Once you have the all-clear to extract data, you will need the following data compiled into a master spreadsheet:   Client demographic data: Your clients’ names, household info, birthdates, addresses, emails, phone numbers, social security numbers, etc.   Client account data: All your clients’ accounts, including registration types and beneficiary information. It is also important to have your clients’ asset allocation, tax budgets, etc.  You will likely derive all this information from two primary sources: your CRM and the custodian. If you are moving to a firm that provides transition services and support, they will likely provide the configured spreadsheets for you so that you don’t need to worry about creating them yourself.   Important to note: Take this opportunity to rigorously inspect the data for gaps or errors. Even a single typo on an email address, such as “.con”, can cause significant delays during the transition process – and will be much harder to identify later in the process.    Now, unfortunately, there are some instances where you will not be able to take client data with you, specifically when you are leaving a captive firm. In those instances, you will want to consult with an attorney on your rights:  Are you allowed to publicly source client information?  Are you allowed to simply promote on social media that you have left your firm and provide generic contact information so clients can contact you?  There are other instances where you may be leaving a firm that adheres to a policy called Broker Protocol, which dictates that advisors leaving are only allowed to take a few key pieces of client data with them, typically the clients’ names, addresses and telephone numbers.   4. Prioritize Your Households  You cannot feasibly transition all clients simultaneously, which means you need to prioritize how you will contact clients and move accounts. Organize your client account spreadsheet into three categories:  1st tier: The most valued and important clients 2nd tier: Important clients but not as important as your top  3rd tier: The people you are either certain will follow you when transitioning, or you do not want to bring to your new firm  This list will help you and/or your transition team stay organized around who will be personally contacted and will receive paperwork, immediately on the first day, and then on the days that follow.  This is especially important if your contract with your former states that you cannot contact clients before the transition date or end-of-garden leave date.   5. Optimize Your Book  The next step is to plan how you will charge clients at your new firm. Enlist the help of the firm you are joining to do this analysis. Create two columns in a spreadsheet:  Current fees: What your clients are currently being charged   New fees: What your clients would pay if you moved them to a new fee schedule (either your firm’s recommended schedule or one that you introduce on your own)  This is a big opportunity for advisors transitioning away from captive institutions, b/ds or hybrids. Firms often have large mandatory platform fees that are tacked on to an advisor’s fee.   As a result of the transition, there might be an opportunity to actually reduce client fees and still generate the same or more revenue; equally, you might be able to keep fees where they are but generate additional revenue.    Advisors also should never shy away from increasing fees after a transition if there is solid justification for it. For example, you might have been undercharging previously and will now be adding a lot of resources and capabilities that you didn’t have access to before. Either way, getting a sense of where you are now and where you could be post-transition will help set you up for long-term success.   6. Prepare Your Communications  The final step is to prepare messaging templates for your transition announcement. Advisors should not be drafting emails the night before their transition; these messages should be planned and optimized in advance.   Once you leave, you should:  Send a mass communication to all clients explaining that you have left your firm, the new firm you are joining and what they should expect over the coming days. (You will want to be careful if you are maintaining a broker-dealer affiliation. B/ds have their own guidelines and rules; in some cases, they will not approve the use of common marketing communication tools like Hubspot.)  Some advisors choose to embed a pre-recorded video or voice note in the communication, explaining the reason for the change.  Reach out to individual clients letting them know about the change and setting expectations about what will happen if and once they agree to come along.   Deliver a templated email to each client once they agree to join you. This should explain that they will be receiving an email from your contract management system such as Docusign in the next few days, and what they should do as the next steps.  This is your opportunity to “control the narrative” and show clients the benefits of following you. Focus on factors such as better and more robust resources and services, fewer restrictions from your firm and more frequent communication – all of which will increase clients’ trust.   Find the Best Path to Independence for Your Practice Financial advisors that follow these steps have dramatically increased their client retention and reduced the stress of transition. But there is another key part of the puzzle: choosing exactly which RIA model you transition to.  That’s why we created A Straightforward Guide to Choosing an RIA. It condenses more than a decades’ experience into a five-minute read, helping you navigate the complicated world of RIAs and find the path that will best serve your goals.