Throughout your career, your clients will ask you many questions. Most will deal with a financial pain the client wants you to help them solve. But one question can stand out, “How am I doing?” In most cases, this is not a quantitative question and can leave an advisor struggling to deliver an answer that truly satisfies the client.

On this episode of Elementality, Reese and Chad examine why it is important for an advisor to understand the reasons why clients look for confirmation that their financial standing is on track—and that their advisor is contributing to the improvement of their financial health.

To provide the right answer, find out how you can clearly articulate the value you provide and show your clients how they are progressing in a way they will understand.

Podcast Transcript

Reese Harper:
It’s important to be able to have a real clear and easy way to describe that value through clear deliverables, a clear client experience, a comprehensive and holistic set of subjects that you’re discussing and good measurements and good data that you’re collecting. So that they know, “hey, when my advisor says I’m doing okay, that’s because they actually know that I’m doing great.”

Jordan Haynes:
Welcome, I’m Jordan Haynes, financial planning specialists at Elements. In this episode of Element Tality, as advisors, many of us have been approached by a client at various points in our relationship and been asked this question, how am I doing? It’s important to not always take this question at face value and recognize that often it’s a reflection of the client’s confidence in their financial standing and in you as their advisor. This emphasizes the importance of being able to articulate clearly the value you provide and the variety of jobs that contribute to the improvement of their overall financial health.

Chad Jardine:
So, first off to the audience. As you know, by now, if you’ve heard any of these episodes, like I’m not an advisor. So a lot of this is new to me and I’m on this kind of journey of discovery along without, well, probably all of you guys are smarter about this than me, but here’s my-

Reese Harper:
At least one out there that’s not, but we won’t talk about him behind his back or her.

Chad Jardine:
So in talking with our team, one of the comments that they made was that advisors who are looking like they’re implementing the element system and as a result of having a system that they’re working, they’re asking about how to respond when a client says, “hey, how am I doing?” And I can relate to that, cause I’m as a person who needs financial planning help that’s a big question on my mind too, is like, how am I doing? And I’m curious about your thoughts about the what’s the best response when the client asks, how am I doing.

Reese Harper:
Well, and to clarify this question, I heard Jordan talking about this recently. I think where we hear this most is with new prospects saying, “how do you guys help people know how they’re doing”, because once they get on the system-

Chad Jardine:
Yeah, I’ve been with an advisor for a period of time, hopefully I’m not so curious.

Reese Harper:
Well, I think our system does a lot to answer that question. So I’m just trying to, maybe I’m being a little prematurely defensive here, but I really do think that there’re some things in our system that help answer this specific question. But you know, clients generally want to just know if they’re doing okay. And if they’re what’s underlying, this is I’m paying you money, Mr. advisor, Mrs. advisor, I want to know why I’m paying you and what you’re doing for me.

Chad Jardine:
Do you think that that underlying that, cause we’re, there’s kind of a question stack too deep here, right? The client asks the advisor, how am I doing the advisors asking us what’s the best response taking advantage of the tools that are attached to element system. Do you think advisors have some insecurity that they are delivering the wrong answer?

Reese Harper:
I think that it’s hard. I think advisors have some income insecurity and fear around what they’re delivering and making sure that it’s the right thing.

Chad Jardine:
Like if I, if I don’t answer this question just right with my client, they might not feel like the value is there and pack up and sign it.

Reese Harper:
I think underlying that is I’m paying you if they’re paying you on an AUM basis or a significant fixed fee that they have to write a check for every year. Like there’s a lot of underlying, like “what am I paying for”? They’ll usually frame it though, the client will usually frame it like, “how do I know how I’m doing, am I doing okay?” I think what they’re sometimes they’re just legitimately asking for clarification. So let’s just make sure that we start with taking them at face value when they say, how am I doing? Let’s just take them at face value and how would we answer how you’re doing? Well, first of all, it’s really important to start to bring progress to your client in a way that they can understand. How you’re going to show them how you’ve made progress with them. The best way that I’ve found to really help people understand that they’re making progress is by acknowledging where they were when you first met, and showing them how much you’ve done together over the period that you’re measuring.

Reese Harper:
It could be the lifetime of the relationship or the most recent period. If someone meets with me and we start, I would have, I would be very hesitant to dive down into the granular like level, because the further you get down into like, “well we did this thing and this one thing, remember when I took that call about your 529 plan, and then remember when we set up that Roth.” Like it starts to just kind of, it does help to show that stuff and it does help to highlight it, but I think it helps more to just show broad progress. And if you’re not making like somehow making broad progress with a client, then it doesn’t really matter how many little tactical things are going on. They’re not going to feel good about the stay status of the relationship. Broad progress is defined by someone’s total net worth and total asset mix, right?

Reese Harper:
If someone’s in the accumulation period, broad progress would be increasing net worth over time. If someone’s in their deceleration period, it would be an appropriate decline in their net worth and assets, right? We’re we are, we are safe and we are comfortable and we are doing good because we are either moving your asset base your net worth in a positive direction, or we’re declining your asset base at an appropriate speed. It’s that simple. And that’s all they really to know, and they want you to reinforce that through a clear understanding of their personal financial statement, any clear understanding of their investment portfolio. And if you can articulate that big vision back for the most part, clients are going to feel like they’re doing well. And you have to be convinced in your own mind that they are accumulating at an appropriate pace and they are declining their net worth at an appropriate pace. And if that’s not the truth that will create anxiety for you, and you need to then be able to share that with your client in a transparent way.

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? I mean, the 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:
You sent me the statement, let’s take the what the client’s saying at face value. And that made me think about, well, what other way could we take it? And I was thinking about the fact that if a, client’s asking you about how am I doing with something as personal and meaningful as their financial situation, in order for them to trust anything that you tell them, you have to have the right type of relationship. Otherwise it doesn’t matter what you tell them that they may or may not believe you.

Reese Harper:
Well, we talked about this in one of our previous episodes where the emotional jobs that an advisor is handling for a client, are often the reason that the client’s going to feel like they’re doing okay. Like if a client, if you have the right emotional underpinnings in your relationship and your client asks you, “how am I doing?” And you say, “you’re doing awesome. I’m actually been very impressed with all the progress we’ve made for.” For someone whose relationship is at a good place, that’s enough. Like it doesn’t have to be proven, it doesn’t have to be demonstrated, that you don’t have to measure it, because if you really do have the confidence behind that’s backed by data and the emotional and relationship kind of connection with the client, then there’s no proof. However, what I meant by you got to take them maybe beyond face value is that sometimes they’re actually wanting slightly more than that.

Reese Harper:
In which case you can demonstrate that broad progress that I was talking about. And beyond that, there’s actually a another level of demonstrating the work that you’ve done, that some people really want to know. Like there is a level of transparency that is lacking in a lot of these relationships. What do you guys actually do to make this whole picture grow or decline? Like, I don’t know what you do. Like I quoted a client the other day, a pretty significant fixed fee, and they had been paying an asset based fee prior, but they’re getting large enough to where I got to a point to where it made sense for me to quote a fixed fee. That fixed fee kind of surprised the client, because in the past they had been anchoring on, that it was a percentage against an account and even though they’re getting disclosed what that fee was, it wasn’t as raw as me just saying, “well, I’m going to cap your fee now at this raw dollar amount that, you have been paying us through this 0.37% on your account.”

Reese Harper:
And what I had to do was then, our relationships very, very good, right. So that was box one, but that wasn’t enough now to answer that underlying question of is this fair, am I doing okay, are you getting paid too much, you pay too little? Then I say, “well, look at all the progress we’ve made and here’s what I do. Here are the hours we spend and here are the deliverables that we work on that then we’ve provided to you that then give me the confidence to say that you’re doing okay.” And yeah, if you went and did this, all of these things on your own that we’ve done over the last 12 months, it would be, it would take 55 hours of time approximately, cause here’s how our time is allocated across the staff. That’s supporting you in my time and the amount of time we’ve spent.

Reese Harper:
And I was able to do that, luckily because I, my system allows me to deliver that. That only took a couple of minutes, but it was fine, but it wasn’t just okay for me to say, “you’re doing great, we’re doing awesome.” I, you have to, I had to dive a little bit deeper to get to the point to where they were comfortable. And most advisors don’t have those levels they can go to, but be careful not to jump to those deeper levels too quickly because sometimes people just saying, “Hey, how am I doing?” And they just want to know, I’m really confident, you’re doing great. Other times, they want backup. Other times they want deliverable proof and really thorough in an idea of where they’re at.

Reese Harper:
So ask the question, “oh, why did you”, when they say, how am I doing say, “well, how do you feel like you’re doing, how do you feel like, what would help you actually, what would you like for me to give you the confidence to know that you’re doing okay?” Ask that question, “what can I do for you that would give me the, give you the confidence that I’m actually providing you with the value you seek?”

Chad Jardine:
Yeah, as I’m hearing you talk about it, it makes me think that somebody comes and says, “how do I respond when my client asks, how am I doing”? That the first response back should be, “well how is your relationship?” And depending on where your relationships at, that may be the first thing that you should be thinking about. How do I cultivate this relationship to be deeper so that I can be, feel confident telling my client the truth. It seems like that ultimately, you’ve got to be able to tell them the truth or you’re cooked.

Chad Jardine:
And then beyond that, does the relationship inform how much extra detail, how much extra definition I need to give around the work that I’m doing to coach them where they need to be.

Reese Harper:
Yeah, and it, that is one of the biggest challenges that advisors face. Is if it gets past that point of, well, the relationship’s good, but it’s, it’s not good enough to not have that secondary conversation or that tertiary conversation about the detail. Most advisors don’t have a process or a client experience that allows them to just quickly say, well, here’s the value if you’re really wanting to dive into it. Because what you’ll find is, most people don’t really want to know everything you’re doing. They just want, sometimes they have a question about, cause they delegated this to you for a reason. They hired you for a reason, but they do want to kind of have a gut check sometimes on the substantive nature of what they’re paying for. And so it’s important to be able to have a real clear and easy way to describe that value through clear deliverables, a clear client experience, a comprehensive and holistic set of subjects that you’re discussing and good measurements and good data that you’re collecting. So that they know, hey, when my advisor says I’m doing it, okay. That’s because they actually know that I’m doing great.

Chad Jardine:
Yeah, I can trust with what they have to say about it.

Reese Harper:
Yeah.

Chad Jardine:
That’s great.

Jordan Haynes:
Next time on Element Tality.

Dr. Meghaan Lurtz:
In the world of finances, we don’t have financial joy. Like what the hell are they, that even look like?

Reese Harper:
I know, that’s the point.

Dr. Meghaan Lurtz:
What does it mean to have financial joy? Most of the time people are coming to financial planners speaking like, “I just don’t want to die broke.” Can you just say, it’s that minimum thing happened. It’s not, we don’t ever talk about, yeah. I want to do all this stuff during my life, I just don’t want to die in the gutter. And that seems there’s zero financial joy, sort of in that.

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