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Don't Give Clients What They Want


No one ever says they want to be mediocre. I'm not aware of anyone whose New Year's Resolution was to go with the flow and be like everyone else. It happens much more subtly. For advisors, it often stems from a desire to give clients what they want. 

Clients, like all of us, tend to want what is expected and conventional. They want what they have been trained to want by the financial industry and the media. Therefore, by giving them what they want, we take the expected path; the conventional path. The larger problem is clients don't know what they want or, more importantly, what they need in advance of working with an advisor.

Ten years ago, the first iPhone was released. At that time, it was not as if people had been asking for a touch screen device with a digital camera, GPS, and millions of apps to choose from to run on it. Apple did not give people what they wanted. Instead, they went ahead and created a whole new category of technology and then asked people if they would use it. Just like Henry Ford had done in creating a new form of transportation and then asked if anyone wanted to drive it. 

The road to obsolescence is filled with stories of Sony Walkmans and Blackberries and Blacksmiths seeking to give people what they wanted. Steve Jobs said no to focus groups because he believed that "people do not know what they want until we show them." 

For financial advisors, this is not necessarily about embracing the most cutting-edge technology. It's about a mindset that seeks to be unconventional even if - and perhaps especially if - it's uncomfortable. 

Consider this: A recent study by TIAA revealed that 64% of people said they would like their investments to reflect their values and social concerns but only a small fraction of them are even aware of how to do it. What explains the gap between potential interest and awareness? Well, apparently a big part of the reason is that advisors are not bringing it up. In that same study, 77% said their advisor had never mentioned it to them. 

How would those clients interested in values-based investing react if they talked with a different advisor who did bring it up with them? At a minimum, they'd probably want to hear more and wonder why their own advisor had never introduced the idea.

Now, the point is not that every advisor should utilize values-based investing. For those who fundamentally disagree with it, that would be the exact same problem in reverse ("A lot of people are saying they want to do impact investing so I need to offer it...") The point is the reason for not offering it should be grounded in a client-centric rationale other than the fact that there would be a lot of effort involved in doing so and/or clients are not (yet) clamoring for it.

One of the biggest challenges we all face is how to differentiate in a sea of sameness. It used to be that holistic financial planning was a differentiator in an investment focused industry. Now, nearly every firm is using the descriptive language of being goals-based and comprehensive.

But if differentiating is a challenge, sounding the same is easy. Just start with the goal of giving clients what they want.

Ultimately, the goal is not to meet expectations, it is to confound and exceed expectations. One way to do that is to figure out what you could be doing that most clients are not even thinking about but would really intrigue and help them if you were to offer it. In other circumstances it may require challenging them on what they think they want and offering up an alternative.

As Henry Ford once said, "If I had asked my customers what they wanted, they would have said a faster horse."