In the financial planning and wealth management world there often is confusion about what role you're playing with your clients. Sometimes you might be a generalist where you're helping your clients think holistically about their life. Other times you might be helping your clients dig deep on a particular topic like buying insurance or putting together an investment portfolio.
I think it's important to know what role you play with your clients and find ways to magnify this role for success. If you generally work with clients as a financial planner, you are by definition a generalist. If you spend most of your time building investment portfolio's for clients, then you are a specialist.
I believe that it's important that you combine both how you get paid with how you work. I believe that too many times we have a disconnect with our clients about what we do. When we pivot to a different activity we can cause our clients to wonder who we're working for.
Most of the clients who choose to work with me do so because I can help them create value in their business and life. We do this through helping our clients think about their business in a different way. When I pivot to speaking with them about managing their 401(k), selling them an insurance program or working with their investments I find their is a general disconnect.
This disconnect is caused by my clients wondering who I'm working for. They want to know am I working in my own best interest or theirs? They are confused as to whether I'm a generalist or a specialist.
I've found that because I hold myself out as a generalist that it's best that I stay in that role. When it comes time to move to a specialty, even ones that I knowledgable about it's better for me to bring in an outsider and help my client hire the best specialist they can find.
Doing this allows me to be consistent in how I work with clients and how they view the work that I do. The clients who value what I do the most are the ones I am consistent with. I understand what roles I've been hired for and stay in those roles.
The challenge with this model of providing advice is coming up with a revenue model that allows you to make a living. This is especially true in the financial planning business.
I've seen reports that many financial planners never do a financial plan. These "planners" use the financial planning process as a way to gather assets and charge asset management fees. There is nothing illegal in doing this. At the same time, I think it's useful to ask what it is your clients hire you for and whether your revenue model is consistent with what you provide for your clients.
It starts with a pretty simple question, "are you a generalist or a specialist?" The answer to that question might have you think about your business, your revenue model and how consistently the two match. What do you think?