The biggest reason for clients to seek out financial advice is that they want clear answers to the big questions in their lives. This is especially true when the markets are volatile or take a downturn ‒ people usually have no idea what that might mean for their lives or their ability to retire. Today’s guest shows us that an effective and successful financial advisory practice must be based on demonstrating clear and measurable progress for clients.
David Christianson is the Portfolio Manager and Senior Vice-President of Christianson Wealth Advisors at National Bank Financial. He was named one of the top 50 financial advisors in Canada by Wealth Professional Magazine in 2014 and 2017. David has written a course for advisors called The Structure of the Client-Centered Practice, as well as a book called Managing the Bull – A No-Nonsense Approach to Personal Finance. In today’s episode, David talks about measuring client progress, what it means to build a client-centered practice, and what David thinks will happen in the future of the financial services industry.
What You’ll Learn in This Episode:
- How David qualifies clients in his onboarding process
- What it means to build a practice that focuses on clients’ needs
- How you can measure client progress and help keep them on track
- What David finds most challenging about advising clients
- How to battle clients’ biggest misconceptions about financial planning
- David’s predictions for the financial services industry over the next five to ten years
- David’s advice for people thinking of joining the industry
- The importance of finding great people to work with you
Links and Resources:
Quotes from David:
“People really want clear answers. They want some certainty, and they want an honest appraisal of where they are and where they’re going.”
“When I was a fee for service advisor, people would come to us not knowing how they were doing on their investments, not knowing if they were going to be able to retire… we developed a process of monitoring and reporting on those investments for them even though we weren’t the investment broker.”
“Information is free now, but wisdom is not.”
In today’s episode, David draws on nearly forty years of experience in the financial services industry to share his invaluable strategies for giving clients clarity and peace of mind about their financial situation. Today, we’re sharing three highlights from the episode:
- Keeping clients on track by measuring and demonstrating their progress
- Battling clients’ misconceptions about financial planning
- The importance of finding the right people to work with you
For the rest of the episode, find the podcast on iTunes or Stitcher, or just hit the link above.
Keeping clients on track by measuring and demonstrating their progress
At times, David’s practice draws clients who have an investment advisor and are already investing, but they have no idea where they stand when it comes to reaching their financial goals.
David can empathize. “People really want clear answers. They want some certainty, and they want an honest appraisal of where they are and where they’re going.” Today, he’s sharing the process he follows to give clients those answers:
- Set specific, measurable and realistic goals
Tracking progress begins with setting measurable and realistic goals. Right from the beginning of the client relationship, David spends a lot of time seeking to understand what his clients want. For example, he might ask a question like “When we meet here in three years, what would you like to have happened in that time in order for you to be satisfied with your progress?”
David asks the right questions and really listens to help them clarify their vision into specific and measurable goals for the year as well as the longer term.
- Measure mutual achievements
In advance of their annual meeting, David asks each client to complete some homework ‒ basically, they update him on what has happened in their lives since they last met. He prepares a customized agenda based on this information.
When they meet, they go over decisions made at the beginning of the year and assess, together, how the client has kept up with the commitments they had made and how David’s team has done with their part. This allows clients to see the progress they’re making and motivates them to stay on track.
David found that this was especially valuable during the 2008 recession when he was clearly able to show clients how the downturn affected their progress toward their goals and how they may need to adjust a few things to stay on track. Often, his clients would realize that there was no reason to panic, and they could adjust their plan without heavily impacting their long-term retirement goals.
Hint: An added benefit of this kind of measurement is demonstrating the advisor’s value to the client. Take this time to show them what you’ve done for them behind the scenes (without getting too technical).
- Update the plan
A lot can change in a year, so David makes sure to keep the financial plan fresh and on track. Whether clients were anticipating a life event that would affect their finances, an extreme downturn had happened, or they had just spent more than expected that year, the plan is updated and adjusted to keep them working toward their goals.
Battling clients’ misconceptions about financial planning
When it comes to the available financial advice, David feels that “there’s more noise than ever” out there. There are seemingly unlimited sources that offer compelling, easy answers to people’s big financial questions. And of course, people want to believe in a shortcut.
The trouble is that many of these sources are unreliable ‒ the information they tout is either unimportant in the grand scheme of things or downright wrong for some consumers. Some financial advice articles are even self-contradictory from one sentence to the next. And what works for 95% of people might be damaging to the other 5%.
Furthermore, big financial questions often don’t have easy answers. As David likes to say, “information is free now, but wisdom is not.” He works hard to tailor advice to his clients’ situations and help them parse through the conventional wisdom to find what works for them.
The importance of finding the right people to work with you
David emphasized several times that it’s hard to run a practice on your own. He recommends finding a mentor and working for someone else for some time before going out on your own ‒ there’s a lot to learn, and it’s best to do it with someone else for a while.
If you are already running or plan to run your own firm, hire carefully, but “don’t be afraid to partner up.” Nobody has all the skills necessary to run a successful practice themselves, and nobody has all the answers.
It’s important not only to find the skills you lack but also to delegate tasks that take your time away from the areas where you can have the biggest impact with your particular skills. Find what you do best, and find good people to do the rest.
Listen to the full episode to learn more from David, including his biggest challenges when advising clients, how his counseling background has made him a better advisor, and how he centers clients’ needs in his process. You can find the episode right here on this page or on iTunes or Stitcher. And if you want to hear from us when a new episode airs, sign up for new episode notifications below.