Most planning firms pride themselves on providing great service to their clients, which often involves going to great lengths to satisfy client requests. Yet in reality, it seems that a lot of our intensive service efforts are less a function of what our clients asked for, and more about what we thought we should offer them. Perhaps a common example is something like quarterly performance statements; most firms say their clients "want" them, yet in truth most firms started sending them to clients on a quarterly basis before ever asking and surveying their clients about whether it was what they really wanted and needed. Now, of course, clients have an expectation of receiving them regularly, and weening them off of a currently provided service can be difficult. But in the end, did clients really need that service, or do clients only expect because we created that expectation for them, but now will feel like we’re taking something away to change it?
Undoubtedly you have, at some point, been exposed to someone from Generation Y (born 1978-2000). It could be in the form of a colleague, an employee, restaurant server or even one of your kids. Gen Y, sometimes referred to as Millienals, Gen Text, and Gen Why have a unique set of characteristics. These characteristics often leave others from other generations, mainly baby boomers, scratching their heads. Since most financial planning firms tend to be owned by baby boomers, and most new financial planners tend to be Gen Y’s, conflict and misunderstandings because of generational differences are common. Fortunately, many can be solved with a little intergenerational coaching!
The growth of the financial planning profession over the past 40 years is a testament to the fundamental need that it serves; if financial planners weren’t delivering value, firms wouldn’t be growing the way that they are.
Yet for so many planning firms, there is no process to really evaluate what it is that clients want, and whether they’re receiving it. Instead, we craft an offering that we think clients will like, and then try to convince them to hire us to receive it.
But is that really the best way to build a business’ service offering?
As with many labor-intensive professional services, financial planning is not inexpensive to provide for clients. There are overhead costs, potential staffing costs, regulatory and compliance costs, in addition to the costs for software and services to support how professionals deliver their value. Accordingly, all of this is wrapped into the price that financial planners must charge their clients to earn a reasonable living and an adequate business profit. Yet often clients balk at the cost of financial planning. Which begs the question – if your clients think financial planning is expensive… to what are they comparing that cost?
Most young planners have heard the stories about how difficult it was in the past to start a financial planning firm. The business was all about products, and sales. It was an “eat what you kill” world – and if you couldn’t hunt effectively for business, you didn’t survive long. Yet the reality is that as the financial planning world changes and evolves, it is actually getting even harder to start a firm now than it was in the past. Because while it may have been difficult to sell products as a 20-something-year-old “kid” in order to survive a decade or two ago, that’s nothing compared to the challenge of trying to be a 20-something-year-old comprehensive financial planning expert who can build a deep advisory relationship with a stranger!