Mark Zuckerberg, founder of Facebook, publicly shared his personal challenge for 2017. He intends to meet people from all 50 states. His stated goal is to use technology to “change the game so it works for everyone.” In order to do that, he is spending the year learning from the customer how his firm can help improve their lives.
What improvements would clients of the wealth management industry want from their advisers to improve their experience? As ironic as it sounds, what I've found from my own direct conversations with clients is that they want us to spend less time talking about money and more time discussing their lives.
We have built an entire profession reinforcing the importance of building a certain size nest egg and focusing individuals on getting to a magic number. People are encouraged to make personal sacrifices today to provide for a future promise of security. Along the way, no one really knows what the markets will do, nor what kind of surprises our clients might experience in their lives.
Lost in all the money talk is the reality almost no one discusses: Money is nothing more than fuel; it is gas in the tank of life. A pile of money is not the ultimate destination any more than a gas station is where we want to travel to. Money is simply a limited resource we use to get us what we want; it is not an end to itself. By focusing so much on the money, we spend far too little time as a profession proving guidance and advice over the only thing that really matters to our clients: their lives. If we wish to take a page from Mr. Zuckerberg's book, we must get face to face with clients and ask these two questions to really do our jobs well and be invaluable to them:
1. Where do you want your life to go?
We all have countless goals and they change over time, but you wouldn't know it when you see the typical financial plan. For too many wealth managers, the focus is exclusively on retirement and how much money needs to be accumulated. But retirement is simply one waypoint along life's voyage. If your clients' plans don't have multiple goals and aspirations, you are missing the chance to help them with everything that matters to them throughout their lives. A good adviser goes beyond growing a nest egg and helps clients prioritize and adjust throughout their financial lives.
2. How do you want to get there? Goals change with time, but every person and family has a unique set of values and priorities that tends to persist. Because most of us want to experience far more than we could ever afford today, people need help making trade-offs throughout their lives. For some, that might mean choosing between paying for private school and buying their dream home. For others, it might be giving to charity while they are alive versus leaving a big inheritance upon their death. As planners, it's natural that we focus on the money, but as a consequence we unwittingly encourage our clients to make choices that sacrifice too much of their lives today to gather a little more wealth in the future. Here's an example: Across our firm and the many thousands of clients we take care of, the number one priority is to spend time with loved ones. However, if they are working so hard building wealth that they seldom see their loved ones, are we really helping them live their best lives? By helping people to focus less on the destination and more on the journey, wealth managers can empower their clients to improve their lives right now in a responsible way. Providing guidance and advice beyond planning and investing makes us far more relevant to their everyday lives.
CAN WE HANDLE THE TRUTH?
It's a lot easier for all of us to keep talking about investing and a retirement goal than to engage with people's entire financial lives. The challenge for our industry is that technology has evolved enough that an online investment platform and a retirement calculator can do that work for a fraction of the cost. Over the course of the next couple of years, that's going to affect all of us one way or another.
If our profession is going to thrive in this time of disruption, we need to copy Mr. Zuckerberg and use 2017 to ensure we are asking our clients these two questions and providing the advice to help them maximize their lives in the decades to come. Our clients know the answers; we just have to be brave enough to ask.
Joe Duran is chief executive of United Capital. Follow him @DuranMoney.