How to increase the value of your financial advisory services by educating your clients
When it comes to the question of how open to be with clients, at what point of the spectrum do you fall? Do you teach them enough that they feel invested in the plans that you build? Do you bore them to tears with lectures about the industry that have nothing to do with them? Today’s guest has found the balance between transparency and relevance, and he’s here to show you how you can increase the value of your service for your clients.
Sasha Djurdjevic, CIM, FMA, DMS, is a portfolio manager serving global private and institutional clients at his firm, River Wealth. He has extensive capital markets experience and has held senior investment roles at prominent investment companies in Canada. Listen in to hear what Sasha has to say about his educational approach to financial planning, his tricks for communicating complex ideas to clients in a way that’s relevant to them, and how he balances his business with raising four children.
What You’ll Learn in This Episode:
- Sasha’s unusual niche (6:40)
- Sasha’s 70% rule for financial planning (13:10)
- How Sasha acquires clients who live abroad (20:00)
- How Sasha uses idea generation to communicate complex ideas to clients (24:20)
- The value of transparency and openness (28:05)
- How Sasha balances running his practice with his personal life (38:20)
- Why it’s important to know yourself as an independent advisor (46:10)
Links and Resources:
Quotes by Sasha:
“Trying to bucket people, and say that if you’re a non-resident you have these unique issues, is useful to a point, but the reality is that every client is different.”
“Help people to understand the context a little more, and you’ll end up with a more satisfied or self-actualized client, who then will value your work more highly.”
“Instead of trying to come up with a perfect plan, come up with a plan that does a pretty good job of reflecting what’s in front of you and what you know, then put your full effort into that plan.”
With Sasha’s experience working with a mix of institutional, retail, and global clients, he’s had to shift contexts, meet people where they’re at, and translate difficult concepts into learning opportunities relevant to each unique client.
Below, we’re sharing three key ideas that he’s imparting to you:
- How Sasha approaches educating his clients
- The value of transparency and openness
- Sasha’s 70% rule for financial planning
For the rest of the episode, find the podcast on iTunes or Stitcher, or hit the link above.
How Sasha approaches educating his clients
When Sasha first started serving retail clients, the biggest challenge he had coming from working with industry clients was the amount of hand-holding he felt he had to do to help people understand their financial situations and the work that he does.
He was used to working with people who knew as much as, or more than, him about finance. But with retail clients, he knows so much more about the topic, and numbers are so much more a part of the way he thinks, that he found it difficult at first to relate to where his clients were coming from.
He realized that as an advisor, he can ask all of the right questions… but his clients will still not necessarily know the answers. They may have a basic idea of what they want and what they can do with their money, but they don’t really know what’s possible.
But he also didn’t want to take client education in the other direction — some advisors give a lot of information to their clients, but that information isn’t relevant to the specific person they’re talking to. Without a focus on the client and their objectives, an overload of information is useless and overwhelming.
Sasha has learned over time to find a balance between the two extremes. He spends time dialoguing with clients and making them part of the planning process. Within it, he finds opportunities to integrate education about their contexts.
In these conversations, he helps open their minds to what they can do in their situations — thus helping them achieve goals they didn’t even know were possible.
The value of transparency and openness with clients
Hand in hand with education comes transparency — and Sasha likes to take the time to explain to his clients how the industry works. He doesn’t teach them the full nuance; rather, he gives them enough context to help them understand their place within it.
Transparency doesn’t specifically produce revenue in itself — instead, Sasha’s reasoning behind it is that it purely benefits the client. Hopefully, that means more business for him, but the goal is never to extract as much revenue as he can from people. The outcome he’s looking for is that the client is informed and happy.
“Help people to understand the context a little more,” he explains, “and you’ll end up with a more satisfied or self-actualized client, who then will value your work more highly.” And when they value your work, they are willing to pay for that value.
Hint: To hear from an advisor with a commitment to radical transparency, listen to our episode on building and managing a successful investment firm. You’ll hear from Steadyhand’s Tom Bradley about his “obscenely transparent” practices and how you can apply them in your business.
The taboo topics
A commitment to transparency means breaching the taboo topics of fees and benchmarking. There’s a common misconception that discussing these topics has a risk of poor optics for the advisor — what if you’re underperforming the benchmark? What if someone else has a lower fee? (And let’s be honest: there will always be someone out there with a lower fee.)
If you’re avoiding these topics, clients will feel like you have something to hide. And if anyone does ask you about them, you’ll feel thrown off and uncomfortable answering their questions. If you address these topics head-on, though, your clients will feel that you’re being open and honest with them, and they’ll trust you more for it.
Hint: A great question to ask potential clients is, “what have your conversations about this (fees benchmarks, or whatever else) been with your past advisor?” Unfortunately, most clients won’t have an answer because their advisor won’t have discussed these things with them — automatically making you look like a more trust-worthy, valuable choice.
Sasha’s 70% rule for financial planning
Sasha feels that the financial plans he creates for his clients are more general than what many other advisors do.
One reason for this is that people’s predictive abilities aren’t very good; most people can’t reliably tell what their lives will look like in the future. And that makes sense — there are so many variables to consider that it’s impossible to know what the future will bring.
Especially with younger clients, there is always time to adjust the plan, and a lot of control over your strategy. It just doesn’t make sense to put in every little detail and obsess over little things 30 years from now that you are still able to change in the meantime.
Hint: Not only is too much detail not very useful, it often bores clients. If you fill your financial plans with information that isn’t meaningful to them (and a lot of numbers they don’t understand), they won’t feel as invested in the plan and will be less likely to stick with it.
When it comes to financial planning, Sasha applies a rule used by the US Marines: the 70% rule. In imperfect situations — like a battlefield or, let’s be honest, life in general — don’t aim for a perfect plan. Instead, aim for a plan that’s 70% there. If you have 70% of the information you need, 70% of the possible implications of your plan and 70% confidence in its accuracy, that’s a great start.
And that’s the caveat — it’s a start. Put your full efforts into the plan, with the full understanding that you will adjust it continually as you learn more information.
Catch the full episode to hear from Sasha about how he works globally while thinking like a local business and why as a business owner, the first thing you need to understand is yourself. You can find the show right here on this page or subscribe on iTunes or Stitcher so you don’t miss any episodes.
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