For so many, the season of summer is a time of vacation and family trips, whether for some rest and relaxation or just to get away from the local heat. And the fact that clients tend to travel more during the summer means some slowdown in meetings and business activity as a financial advisor is almost inevitable. Which in turn frees up more of the advisor’s time to take a vacation of their own, or at least slow down and relax with family… and catch up on some good books.
The question, of course, is then to figure out “what’s a good book to read these days?” As a voracious reader myself, I’m always eager to hear suggestions from others of great books to read, whether it’s something new that’s just come out, or an “old classic” that I should go back and read (again or for the first time!). And so, in the spirit of sharing, a few years ago I launched my list of “Recommended (Book) Reading for Financial Advisors“, and it was so well received that in 2013 I also started sharing my annual “Summer Reading List” for financial advisors of the best books I’d read in the preceding year. It quickly became a perennial favorite on Nerd’s Eye View, and so I’ve updated it every year, with new lists of books in 2014, 2015, 2016, 2017, and a fresh round last year in 2018.
And now, I’m now excited to share my latest 2019 Summer Reading list for financial advisors, with suggestions on books about everything from how to better execute a merger or acquisition (if that’s how you’re looking to grow!), build a better “story-based” sales process and your own story-brand (if that’s how you prefer to grow!), some books on practice management and how to run a better business, new perspectives on client psychology and decision-making, how to facilitate better financial health for your clients, and how to better instill your own habits for long-term self-improvement.
So as the summer season gets underway, I hope that you find this suggested summer reading list of books for financial planners to be helpful… and please do share your own suggestions in the comments at the end of the article about the best books you’ve read over the past year as well!
Financial Advisor Book List For 2019 Summer Reading
The Financial Advisor M&A Guidebook (Greg Friedman & Shaun Kapusinski) – Whether it’s out of a desire to achieve greater economies of scale, to supplement organic growth with inorganic growth, or simply a decision as a smaller firm to “tuck in” and get away from the burdens of business management and back to managing clients instead, more and more advisory firms in recent years have been engaging in mergers and acquisitions transactions, with such M&A deals hitting record highs last year. Yet the irony is that, if you ask firms that have gone through significant acquisitions, there’s usually a long sigh, followed by a discussion of a litany of unexpected issues and challenges that arose during the acquisition phase itself, and/or especially during the post-merger integration phase. Because the reality is that the overwhelming advisory firms have never been through an M&A transaction in the first place… until they do it for the first time, and suddenly find themselves trying to figure out the complex human and culture and systems dynamics that emerge. In this context, Friedman and Kapusinski share their perspective on how, exactly, to successfully work through a merger or acquisition, with Friedman having been through a sizable merger himself, and Kapusinski working as the COO responsible for operations in a sizable firm as well (in addition to leading the HIFON network of advisory firm operations managers who have been through numerous merger and acquisition integrations!). Notably, though, the point of this M&A Guidebook is not how to negotiate the terms of the deal and execute the purchase itself, per se, but instead is about the raw integration of technology, operations, systems, and people. Accordingly, the Financial Advisor M&A Guidebook covers the key issues and concerns to think about in each stage of the merger/acquisition integration process itself, from creating an inventory of key technology and systems (not just core software, but also hardware [does one firm use Dell computers and the other Apple?], systems software [is one firm Outlook-based and the other Gmail-based?], and ancillary tools [do both firms use QuickBooks or some other advisory firm accounting solution?]), aligning the firms’ technology strategies (not just what tools will be used, but who will be responsible for making technology decisions in the future, and how will the firm get joint buy-in of all the stakeholders across both firms to ensure the merged technology is adopted), to setting an integration timeline (CRM integration first, then portfolio accounting/trading systems, then the remainder of email/calendar IT, and lastly portals and website), and how to communicate the rollout to the teams (from both firms) and find the “key allies” internally who will help to shepherd the process. Which is valuable to know regardless of whether you’re in the midst of executing a merger or acquisition… or just thinking about it, and want to better understand what you’ll really be getting in to!
Storyselling Revisited: How Top Advisors Persuade (Scott West & Mitch Anthony) – While a few are natural born salespeople, for most financial advisors, “selling” is hard work, especially in an age where our primary “sale” is no longer even an insurance or investment product, but the purely intangible and seemingly ephemeral service of financial planning. For which the natural temptation of most financial advisors is to try to illustrate the complex challenges that their clients face, mixed in with a few data points and statistics… in the hopes of them demonstrating how much knowledge the advisor brings to the table, and how he/she can be the solution to those complexities. Except, in practice, “selling complexity” often just causes the prospective client’s brain to just shut down entirely in the face of something they don’t understand or find overwhelming! So what’s the alternative? To illustrate the key points with a story instead, effectively appealing to both the “left” (analytical) and “right” (creative/artistic) sides of the brain… a process that West and Anthony call “storyselling” in this update to their original industry classic “Storytelling for Financial Advisors.” Notably, though, Storyselling Revisited is not merely an encouragement to use stories to explain and sell your value proposition to clients, but an entire process of how to craft such stories effectively, from setting the context to developing the right images and visual stimulation, leveraging metaphors and creating emotional affirmation, and then how to better engage clients in the process, from reading body language, to helping asking the right questions (with examples provided!) to get clients to share their own stories to become more deeply engaged, and even a series of “sample” stories to help illustrate key financial concepts that advisors can use in their own practices.
Building A StoryBrand (Donald Miller) – The traditional approach to marketing is to tell the story of yourself and your business, what you do and who you serve (and perhaps why you do it), in the hopes of getting them interested in what you have to offer. But as Miller points out, in the end, the client doesn’t care about your story (as the advisor); they care about their own story, and perhaps maybe (if you’re convincing enough!) why you should be permitted to become part of their story. Which means the essence to a good marketing story for the business is that you and your advisory firm should not actually be the center of the story… instead, “the client should be the hero of the story,” told in a way that connects the business and what it does to solve our core needs as human beings: to survive, thrive, be accepted, find love, achieve an aspirational identity, or bond with their tribe. Ultimately, though, “Building A StoryBrand” isn’t just a book about the importance of crafting better marketing messages (through storytelling); it is literally the StoryBrand 7-Step (SB7) process of how to actually create that story for your own advisory firm and value proposition, by following the essential 7-step process of storytelling: to 1) define a character (who has some gap between where they are and what they desire), who 2) faces a problem (a challenge that they need help to overcome), and then 3) meets a guide (where your advisory business comes in to help!), who 4) gives them a plan (a process to go through in order to solve their problem and achieve their desire), and 5) calls them to action (because by default, we as human beings will be lazy, and won’t necessarily take action to change until/unless we’re called upon and prompted to do so!), which 6) helps them avoid a failure (what does your business help clients to avoid?), such that 7) the story ends with success (a picture that must be painted for them to really understand what your business does that can help). All of which can then be applied to the advisory firm’s website and other marketing materials to communicate the whole story journey to prospective clients. Because in the end, it doesn’t help to spend more money on marketing the advisory business, if the firm hasn’t figured out the right message to communicate – with clarity that will connect with prospective clients – in the first place. (And for those advisors who want even more support, Miller has 2-day StoryBrand workshops that are becoming increasingly popular with financial advisors as well!)
Measure What Matters: Rock The World With OKRs (John Doerr) – One of the fundamental challenges of running a successful business (advisory firm or otherwise) is that it’s not enough to have a brilliant vision of the business and what it could be; success means also being able to translate that vision into execution, and get everyone on the team onto the same page about what needs to be accomplished to get there. And the key to that execution – a system pioneered by Intel during its heyday of growth in the 1970s, and now used famously at Google, as well as DropBox, LinkedIn, Oracle, BMW, Disney, Exxon, and more – is all about developing “OKRs”, short for Objectives (the “what” that must be achieved) and Key Results (the “how” to get to the objective, concretely and numerically defined to know whether success is being reached or at least is on track). The reason why OKRs matter is that defining clear and specific Goals are crucial to getting everyone on the same page – especially in a diverse and growing organization – and “hard goals” are even more effective at driving people to higher levels of output by engaging everyone to stretch a little further to reach the challenging objective. Or stated more simply, having clear OKRs helps businesses and teams to Focus (figure out what really needs to be prioritized, or not), Align (to get everyone marching in the same direction), Track (to know when the business is on track to meet its objectives or not), and Stretch (testing our limits to pull together and achieve more). Accordingly, the bulk of “Measure What Matters” is a detailed walk-through of how to apply the principles in one’s own business, figure out the relevant Objectives and how to define the right Key Results, and then “measure what matters” in the data of the business to know whether the business (and everyone who’s a part of it) is on track to achieve its goals. Which should be especially helpful for advisory firms that have grown beyond the founder/owner, and are now struggling with the challenges that come from trying to keep an ever-growing team on the same page and marching in the same direction, and need a system that will create more structure for the business.
Serious Shift: How Experience Staging Can Save Your Practice (Dennis Moseley-Williams) – In recent years, there has been a growing focus on the need for financial advisors to improve their “client experience.” In some cases, it’s to justify (or defend against the pressure on) their advisory fees, while in others it’s about creating a more differentiated offering to clients in an increasingly competitive environment. Either way, though, the essence of the discussion is that it’s no longer enough to just be a knowledgeable advisor and give great advice; instead, it’s necessary to make the experience better as well. Except there’s remarkably little guidance on what it really means to create a superior client experience, beyond just trying to give clients better service along the way. And for most advisory firms, it’s difficult to restructure their value proposition from where they are today, akin to trying to rebuild an airplane while it’s already in the air mid-flight. Accordingly, what’s unique about Moseley-Williams’ book isn’t just that it’s about how to try to “shift” the firm to craft better experiences for clients (which starts by clearly segmenting clients to be able to match the value and depth of experience to what the client actually pays, and then developing an “Experience Matrix” of what experiences clients will receive at each tier)… but the focus on what advisors need to do to actually bring about change in their own practices (where it’s hard to change mid-course and there’s never enough time to do everything the advisor wants to get done). Told through stories of what VSAs – Very Successful Advisors – do that works, “Serious Shift” is written specifically for financial advisors who have hit the wall, or are stuck in a rut, know they need to change to get better, but just can’t figure out how to get there from here.
Risk Savvy: How to Make Good Decisions (Gerd Gigerenzer) – Talking about risk and probabilities is one of the most important things that we do as financial advisors. When clients are “risk literate” – they understand the risks before them, they are more empowered to make and take action on their decisions, and are better prepared to handle their emotions if the “risky thing” happens. Yet, just talking about risk and probabilities isn’t going to get the job done; more and more behavioral finance research is showing again and again that people are not always good at understanding and processing risk. But it doesn’t have to be this way! In Risk Savvy, Dr. Gigerenzer explains the common downfalls of risk processing, and gives some extremely practical advice on how to present and discuss risk in a way that makes processing much easier… starting with (believe it or not) trusting your intuition over the numbers and employing natural frequencies (less confusing and intuitive expressions of data) over probabilities (more confusing and not intuitive expressions of data). More broadly, Risk Savvy explores the psychology of risk, explaining our obsession for certainty with what he refers to as “illusions” – such as the zero-risk illusion and the turkey illusion (the difference between handling truly known risks [gamble] and truly unknown risks [stock market performance]) – along with the emotions of risk, why and how intuition matters, and the different ways in which risk can be presented and engaged with in order to promote understanding. The key point, is simply to recognize that rather than trying to engage in paternalistic decision-making on a client’s behalf when they need more risk than they can tolerate, a client’s risk literacy can be improved with effective communication, leveraging the techniques to better present and discuss risk that Dr. Gigerenzer shares so that clients can actually learn from and engage with you (and the risks they take) in a more powerful and hopefully conversation-producing way!
Payback: Debt and the Shadow Side of Wealth (Margaret Atwood) – We all have money memories. Some memories are good, and some are bad. Some are individual, and some are collected in culture through literature and other means. Whatever the source, though, the important thing is that we recognize what our money memories are, and how they shape who we have become, the way we see the world around us, and our own relationship with money. In her part-memoir, part-literary history, the famous dystopia writer Margaret Atwood discusses her own personal questions, struggles, and financial situation against and through the medium she knows best… literature. Atwood starts her book in a way that not only invites the reader into her perspective, but in many ways challenges them to think about their own, and what that perspective means to the way they see and interact with the world and financial messages that surround us. The book builds on itself in and its main topic – debt – by seeing debt through different lenses: historical, sin, plots, revenge, and literature. The main reason to read this book this summer, outside of the facts that it is extremely interesting and rather short, is that it hopefully makes you think about your own history, sins, plots, and money memories picked up along the way, and how those things have manifested in your life, growing a deeper understanding of yourself and the financial messages that permeate our shared culture.
Scarcity: The New Science of Having Less and How It Defines Our Lives (Sendhil Mullainathan & Eldar Shafir) – There have been many books over the years on how our psychology impacts our decisions, and even how the environment (from social networks to schedules, families to work, and just about everything else we do) shapes our decisions. But few books bring it all together and show how the environment can actually mess with our psychology… and then, in turn, our decisions. Which is important, because better understanding such influences can then help us to understand why human beings don’t act as economic models predict “homo-economicus” should act. In their three-part book, Mullainathan and Shafir first walk the reader through a number of innovative and complex research outcomes that single out the phenomenon of “scarcity” in particular, and how being in an environment of scarcity changes people’s psychology in two very distinct ways: it results in a “depleted bandwidth tax” (where there isn’t enough mental energy to make good decisions) and leads people to employ “tunnel” thinking (missing out on potential alternative/adjacent solutions along the way). And notably, these scarcity effects can occur in any type of “scarcity” environment – beyond just financial poverty – from calories (dieting) to time (rushing and deadlines). In turn, Scarcity also provides ideas for how we can better recognize and then navigate around the impacts of scarcity in our own lives (or the lives of our clients, from their money to their time and more!). So don’t fall prey to scarcity this summer; instead, make reading this book (or listening to the audio version on a summer road trip) an early to-do and ensure that you make the best of your time and money moving forward!
Facilitating Financial Health: Tools For Financial Planners (Brad Klontz, Rick Kahler, & Ted Klontz) – One of the fundamental challenges that we face as financial advisors is that, similar to seeking out a doctor regarding a health concern, clients rarely engage a financial planner until there’s already a problem that they need help with (typically triggered by some type of life event or similar transition, from a death in the family and an inheritance or the sale of a business, to a marriage or a divorce). Which means it’s often very difficult to help clients with the fundamental factors that minimize problematic money behaviors and lead to good (financial) health… because they’re often already in crisis (or at least heavily stressed) by the time they’re meeting with an advisor for the first time. And at that point, any existing dysfunctional money behaviors tend to just amplify problems further. In this context, “Facilitating Financial Health” is about what financial advisors can actually do – in the moment with clients, and over time – to help them actually improve their financial health to have a more “balanced, comfortable relationship with money,” instead. From understanding their unconscious beliefs and “money scripts,” to getting comfortable living within their means and knowing the mechanics of money, but also learning to communicate openly and honestly within the family about financial issues, and being able to set clear goals and plans (and then taking action consistent with those goals and values). Notably, though, the authors have roots in psychology and (financial) therapy and approach the topic more from the perspective of mental and psychological health (around money), as opposed to just the traditional financial planning strategies themselves (save more, spend less, etc.). Because the reality is that all the technically-accurate financial advice in the world is irrelevant if clients won’t actually implement the advice… and helping clients to implement inevitably will end out touching on personal and emotional issues anyway. (After all, if it was just about having the necessary information to know what to do, clients could just read financial tips on the internet and do it themselves without a financial advisor anyway!) Accordingly, the authors present a model they call “integrated financial planning,” which, by design, incorporates the interior (emotional) and exterior (knowledge) aspects of financial planning and financial psychology (because again, it’s not just about being financially successful with money, but having a financially healthy relationship with money as well), to help advisors craft and deliver advice that clients will actually implement and stick with in the long run.
Atomic Habits: An Easy & Proven Way To Build Good Habits & Break Bad Ones (James Clear) – The traditional view of “success” is that it comes when people have natural abilities that allow them to excel, and/or a breakthrough moment that forever changes their trajectory. But in reality, a great deal of success comes simply from the cumulative and compounding benefits of making small incremental improvements that add up over time – the “overnight success” that was actually 10-15 years in the making. After all, the reality is that getting just 1% better every day leads to a cumulative 37X (i.e., 3,700%) compounded improvement for the year (while getting 1% worse every year leads to a 99.97% compounded decline!). Which means long-term success is less about having breakthroughs and more about taking a never-ending series of 1%-incremental-improvement steps… and simply allowing time (and compounding) to work its magic; or as Clear puts it, “Habits are the compound interest of self-improvement,” (just as money multiplies through compound interest as well), and “you get what you repeat.” With the caveat that it’s hard to develop and stick with new (good) habits that create incremental change (what Clear calls “atomic habits” because the improvement is just 1 atom at a time!), because there’s little noticeable impact after days or weeks (even though there are huge results over months and years!). Which means, in turn, that it’s more about creating the right systems that can be consistently reproduced to get to the desired results (because with compounding, individual goals seem so far away for so long until the compounding takes hold!). Accordingly, the focus of “Atomic Habits” itself is a deep dive into what it is that actually causes habits to form – a structure of Cue (something that triggers your brain to initiate the habit process), Craving (the desire for that the feeling you get when you engage in the habit behavior, from the sugar rush of eating sweets to the relief of smoking a cigarette), Response (the actual action step or habit that occurs in response to the craving – the habit itself), and Reward (the positive outcome of the Response that satisfies the Craving and reinforces the behavior) – and in turn leads to Clear’s “Four Laws of Behavior Change” to improve our habits: make it obvious (cues that are easier to spot start the habit faster, and you can hide or make invisible the cues you don’t want to discourage bad habits); make it attractive (try to tie good cravings to good habits, or conversely associate unattractive cravings to break bad habits); make it easy (the easier it is to engage in the habit behavior, the more likely to reinforce the cycle); and then make it satisfying (ensure that the outcome is positive for the habit you want to reinforce to ensure the cycle builds). And so for all those who are trying to figure out how to make better progress down the path of building good habits so the compounding cycle can work more favorably – or how to finally break some bad habits instead – “Atomic Habits” is a fantastic (and well-researched) book for self-improvement to help us all build better habit systems for ourselves.
If you’re still looking for more book ideas, be certain to also check out our prior summer reading lists, along with our overall list of recommended books for financial advisors. They may be lists we’ve published in the past, but if you haven’t read the books yet, they’re still new to you! 🙂
Top Must-Read Books for Financial Planners
2018 Summer Reading List of “Best Books” For Financial Advisors
2017 Summer Reading List of “Best Books” For Financial Advisors
2016 Summer Reading List of “Best Books” For Financial Advisors
2015 Summer Book List For Financial Advisors
2014 Summer Reading List Of Best Books For Financial Advisors
2013 Summer Reading List Of Top Financial Advisor Books
So what do you think? Will you be reading any of these books over the summer? Do you have any suggestions of your own that you’re willing to share? Please share your own great reads in the comments below!