You know how stressed your clients are about getting back into the markets. What can you do about it? The answer will lead you to the new business model emerging in the wealth advisory space.
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A surge in the capital markets is not the only way to lower your clients' blood pressure. It’s also something that’s not under your control. There are tools available that you can control. Let’s take a look at some of them and get an overview of the new business model.
1. Understanding that most individual clients are members of a family, each of whom is directly affected by the decisions made about the wealth.
Rarely is it the case that the person sitting in your office makes all the decisions about the wealth. That person is just as likely to be a family representative who delivers those decisions to you. It’s important to know who your client really is.
2. Realizing that each client’s family has a set of alternative assets that largely go completely unmanaged. These are the intellectual, social, and human capacities of your clients’ family members. We can also call them organic assets.
Over the next decade, it is predicted that the so-called softer issues of wealth management will become the predominant focus. But clients and advisors have different perspectives
. They tend to speak a different language. The most authentic way to bridge this divide is to realize that investors at all wealth levels have this set of alternative-organic assets in addition to the material and financial ones.
3. Understanding the need to connect with clients at a deeper level of conversation around this alternative-organic set of assets.
We heard recently from Dr. Mary Gresham on the psychology of money. She has built an effective model to guide you in addressing the deeper issues of wealth management. These deeper levels of conversation are where greater trust and loyalty can be built. This is where you can begin productive conversations about the family’s alternative-organic assets.
4. Creating an atmosphere that is conducive to such conversations.
Neither you nor your client may feel comfortable talking about these deeper issues of wealth management. So, psychologist and financial planner James Grubman wants you to change your office décor. A less conservative, less business-like, more living room type of environment could be called advisory Fung Shui
. It makes clients feel more comfortable in talking about their real goals and broadens their attention beyond portfolio performance.
5. Creating an investment strategy that connects the management of material and financial assets to the management of the client’s alternative-organic assets.
Once you’re in this deeper level of conversation, it’s essential to discover the needs of these alternative-organic assets. The needs of these intellectual, social, and human assets carry the greatest influence on decisions made about the material and financial assets. Continue to ignore them and both you and your clients will be operating in the dark.
These five components build on each other and are the secret to future advisory success. We’ll explore each of these new model components in greater depth over the next few Mondays. Meanwhile, please share your experiences and offer your comments.We can learn from each other along the way.