As new financial advisors, you begin your career by learning technical skills like retirement needs analysis, cash flow modeling, and how to prioritize goals with your clients. Then, through experience, you begin to tackle more challenging concerns as you help them solve their emotional issues.

Dealing with client financial anxieties can leave you feeling as if you aren’t bringing enough value to the relationship.

On this Elementality podcast, Reese and Chad discuss how creating value during the client experience requires an ability to balance both the functional and emotional jobs your clients require. It’s not easy, but balance is what’s needed for clients to find the value they are really seeking.

Podcast Transcript

Reese Harper:
There should be consistent client deliverables, consistent experience, and it should be defined more than just this loose relationship where it’s mostly emotional jobs that we’re doing over the phone with very little dialed in process because the client experience is more holistic than just talking to you.

Jordan Haynes:
Welcome to Elementality. I’m Jordan Haynes, financial planning specialist at Elements. In this episode of Elementality, Reese and Chad talk about the perceived value clients have in you and how, as an advisor, we’re often trained in the technical skills of financial planning, but left to ourselves to figure out the emotional and behavioral skills of working with clients. As you listen, consider not just the value delivered to clients through a well-designed financial plan, but also the relational value your clients perceive as you balance the functional and the emotional jobs that need to be done. Enjoy the episode.

Chad Jardine:
All right. Reese, talking with Jordan earlier this week, and for those of you in the audience who don’t know who Jordan is, you’ve heard him on the podcast before. He’s one of our CFPs, and he’s doing a lot of work right now onboarding new customers to the Elements platform. As part of his job, he’s asking them what is the key value that they see themselves delivering to their clients. What was surprising to me was that he was getting responses that were inconsistent, like advisors have different visions of what the value is that they deliver to clients. I just wanted to ask you why you thought that’s the case.

Reese Harper:
Well, I think this is really interesting to me to actually hear Jordan do these interviews because I get to hear how different value propositions are across the industry. I don’t think that’s entirely a bad thing, but I think it’s important to look at it from the client’s perspective, not just the advisor’s perspective. If you have a CPA, and when he does taxes for another person, he’s not really wondering what he needs to do to deliver the value to the client. It’s obvious. You got to collect the data, put it in Lessert, pump the tax return out and file it. The more volume you can do, the better off you are.

Chad Jardine:
His clients have an expectation that he’s doing their taxes.

Reese Harper:
There’s a time deadline, right? There’s some aging process on when he’s getting late. He has to get it done. In wealth management though, a lot of that is very subjective. It’s super subjective. It shouldn’t be, but it is. When I started, I think back 15 plus years ago when I started delivering my first service model. I’ve got a big Excel spreadsheet with a lot of check boxes in it, trying to figure out what am I going to do that is financial planning? I’m listening to podcasts. I’m trying to take in information. It’s evolved a lot over the years. I see that same thing happening to advisors. They’re trying to figure out what it is that the value of a financial advisor really is. That being said, I don’t think there is, it shouldn’t be that inconsistent, and actually says more about the lack of our understanding of the client and their needs than it does about the advisor. The advisors are exploring things because they haven’t quite understood what the client wants out of this interaction, out of this engagement.

Chad Jardine:
Yeah. You said something earlier that I was going to ask about because you’re like, well, I don’t think it’s a bad thing that these are different ideas about what the value is. I wondered about that. Well then, as a client, do I need to just find an advisor who thinks the value is the same thing as what I want?

Reese Harper:
Yeah, I should clarify that because I think it’s okay if someone says, “I emphasize this,” or “I emphasize this.” If someone’s really big into dentists like I was, and I was niching in that market, I’m going to have some parts of my service model that are going to be pretty specific to my customer’s needs. I do think there’s this fundamental underlying value proposition that shouldn’t change. For example, is it okay for a financial advisor to not have an accurate personal net worth statement in front of them before they give advice? Can a doctor give advice to a patient, right, without having any blood work done, and they’re about to give a cardiovascular diagnosis? You can’t really. Clicking a personal financial statement and maintaining an accurate personal financial statement is a really important precursor to delivering advice.

Reese Harper:
If you asked advisors how they go about doing that, and how frequent they compile that, and how often they send it to a client, it will be very inconsistent, but that is an underpinning of essential baseline advice delivery, and it’s really hard to do, and it’s very inconsistent how it’s being done.

Chad Jardine:
Are you saying that this is an area where industry-wide, we have inconsistencies that in a perfect world these should be ironed out?

Reese Harper:
Yes. In a perfect world where we were all, another 20 or 30 or 40 years in the future, we wouldn’t be debating the efficacy of compiling a personal financial statement on a quarterly basis to deliver advice. You would just assume that was a standard that you need to uphold. In software, there’s all this discussion around CX, and user experience, and user design, and it’s an appropriate obsession with what is the user experience. In wealth management, we are very antiquated in our understanding of UX and CX. Specifically, when we say CX, we mean, what is your client’s actual experience from start to finish, month to month, year to year. There’s really inconsistent client experience across the industry, and that causes some advisory firms to just flourish. Most advisors are just trying to figure out their process and struggle with that quite a bit.

Jordan Haynes:
Do you ever wonder if you do enough for your clients to be worth what they’re paying you for? Do you feel like you’re delivering enough value? Many advisors wrestle with questions like these. I’ve used the Elements financial planning system for a couple of years now. With it, I can deliver periodic insight about a client’s financial health and progress by utilizing standardized measurements. They know I’m watching their progress and can actually see how my advice is improving their life. With the Elements financial planning system, you can also give your clients consistent planning guidance and the valuable advice they expect. Check it out at getelements.com/meet.

Chad Jardine:
Yeah, I was going to ask about that. You gave the example of preparing net worth statement before you give advice, which seems to me to be a useful tactical thing for how advisors go about their work. I’m still a little bit back on the idea of what’s the client experience. If the value that’s being delivered by financial advisors is inconsistent, and I’m a client, how do I know if I need one or not? What do I expect to get out of engaging in a financial advisor? When I do engage them, are my expectations met or not? This goes, I think, part of the customer experience is the client experience.

Reese Harper:
It’s easier to meet the customer expectations. Customer expectations are usually met with soft skills, meaning the customer experience is some kind of pain. I’m going through a divorce. I’ve got some liquidity. I have extra income. I need to do something with it. They don’t know what to do with their money, and so they reach out to an expert, and that expert resolves their pain, usually with soft skills, or doesn’t resolve their pain because they have a lack of soft skills.

Chad Jardine:
Yeah. Explain a little bit more what you mean by soft skills.

Reese Harper:
We’ve talked in the past in the podcast about emotional jobs versus functional jobs. If someone calls me and they have a financial pain that they’re trying to resolve, I can resolve that through good listening skills, restating their problem that they’re voicing to me, making sure I understand what they’re trying to accomplish, and then presenting them with a solution, all conceptually, completely without documents, no deliverables. You literally can resolve someone’s pain through a conversation if you have the right communication skills.

Chad Jardine:
I’m a little, teeny bit devil’s advocate here.

Reese Harper:
Okay.

Chad Jardine:
Would it be cheaper for me to just get a therapist if I have a big financial life event?

Reese Harper:
Yeah, in some cases maybe, unless part of that advice was tactical. What I’m saying is someone calls, they ask you a question. You can relieve their anxiety as long as you can deliver in their mind, describing to them what the solution will be. It still involves some implementation of things.

Chad Jardine:
You probably don’t have the risk of the therapist saying, “Well, just give all your money to me. I’ll take care of it.”

Reese Harper:
Yeah. I mean, you do have to deliver actual setting up an investment account, developing some kind of a plan with what to do with the money. They’re just painting a picture in their mind that you’re going to do that at some point, but their pain will be gone. You’ll notice an email coming, some advisors after one hour of conversation, they’ll get an email back from a client. It’ll be like, “Oh my gosh. It was so helpful talking to you. I finally feel like I’m great. I don’t have any more anxiety and pain.” Essentially, they’re summarizing, but you’re great. I love working with you. It’s a great, but you haven’t done anything. You haven’t delivered anything. My concern though, isn’t that that’s all that’s required. That’s all that’s required to resolve the client’s naive understanding of their financial pain, right, but it’s not what’s required to take someone from that place to full financial health.

Reese Harper:
Being financially healthy is much more than resolving their concern and pain. What ends up happening is the talented advisors quite quickly can resolve the pain through a conversation that usually then puts a bandaid on things for three to six months.

Chad Jardine:
Well, that, maybe think about it. You zeroed in pretty quick on, Hey, we got this emotional job, maybe the biggest first job to be done …

Reese Harper:
It’s the one that can immediately resolve the concern the client has.

Chad Jardine:
Yeah. The question that that prompted in my mind is if I’ve got two financial advisors, and they both have different ideas about the value they’re creating, is one of them right and one of them wrong?

Reese Harper:
Yes. One is more right, and one is more wrong from an objective perspective.

Chad Jardine:
For what it’s worth, my wife really likes to describe me as less right most of the time. Less right, more right, that works.

Reese Harper:
There are some objective standards here. Someone who’s in their accumulation phase and whose net worth is going down is not being given good advice. Two people with identical incomes, identical in net worth and balance sheets, one person’s net worth is increasing, one person’s net worth is declining. One person is not objectively moving forward in a positive direction. You can, with numbers and with some calculations, measure a financial health much better. Really the question that I think is the overarching issue here is, is the client experience something that extends beyond just a quick call to make them feel better about their situation?

Chad Jardine:
Yeah. Yeah.

Reese Harper:
You’ll be able to manage your clientele exceptionally well and have pretty high retention if you just pick up the phone every time someone calls, and if you have the right soft skills. Those clients won’t necessarily be financially healthy, and they won’t necessarily have net worth increasing high savings rates, low personal consumption rates. Their effective tax rate may not be, they might feel great about your relationship because you’re there as that financial therapist which isn’t a bad thing. I mean, if you had to pick financial therapist versus low emotional IQ financial advisor that’s just highly, technically skilled, but no connection with the client …

Chad Jardine:
There’s no strength in the relationship.

Reese Harper:
Yeah. You’d probably opt for the high emotional jobs to be done advisor that has the soft skills that can drive behavioral change, but you want both. You’re trying to combine really consistent client experience. When am I delivering that personal financial statement? What is the savings rate of this customer need to be? What is the burn rate of this customer needed to be? What should their net worth increase be given their income level for their age, right, and their family size. There should be consistent client deliverables, consistent experience, and it should be defined more than just this loose relationship where it’s mostly emotional jobs that we’re doing over the phone with very little dialed in process. The client experience is more holistic than just talking to you.

Chad Jardine:
Yeah. That makes sense.

Jordan Haynes:
Next time on Elementality.

Chad Jardine:
I like letting that financial advice has always been meant to be. At some point, financial advice has always been meant to be. Financial advice is not about products. Financial planning is not about spreadsheets. Financial planning and financial advice, if they’re done well, is all about the client. It’s about learning that complexity of who the client is. The poem, if you will, the piece of music that the client is, and what they aspire to. That’s a constantly changing thing.

Jordan Haynes:
You can learn more about the Elements financial planning system at getelements.com/meet and schedule a time to meet with me or one of our friendly financial planning experts. Elementality’s executive creators are Reese Harper and Chad Jardine. Elementality is produced by Abby Morton and directed by Jordan Haynes.