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Why “Financial Planning” Doesn’t Describe Your Value

Each person’s life is filled with a multitude of jobs that need to be done. From the many tasks you need to accomplish for your work to taking out the trash or walking the dog, there are a myriad of little jobs that must be completed every day. Clients actually rely on you to ease their stress when it comes to money by completing numerous financial jobs—so they don’t have to. It’s crucial that you help clients see the jobs you do for them through that lens.

On this episode of Elementality, Reese and Matt explain why the term “financial planning” doesn’t really reflect the underlying jobs being done—and why you need to point out all of the financial jobs you are doing so clients realize the value you provide.

 


Podcast Transcript

Matt Glazer:
I think a lot of people would argue, “Well, I do have a process, and I put it on my website.” There’s a discovery meeting and a get-organized meeting and a review-the-plan meeting and an implement-the-plan… I think people spell out a process and they feel like that this is successfully communicating to the client what we do. But I think, I tend to agree with you that that’s not specific enough, that telling people “We’ll review your savings plan,” is candidly not specific enough, in many cases. And at the end of the day, most consumers still think that we do their investments.

Jordan Haines:
Welcome to Elementality. I’m Jordan Haines, financial planning specialist at Elements. Each episode, Reese and Matt will discuss major challenges faced by financial advisors, and the things they can do to navigate the complexities of delivering quality financial advice to clients. We hope you enjoy this episode.

Reese Harper:
Welcome to another episode of Elementality everybody. Tuning in with me today, our favorite friend from the East Coast, Dr. Matt Glazer.

Matt Glazer:
Doctor?

Reese Harper:
He’s not a doctor, but for those of you who did not know that, been affectionately referring to Matt as one of the smartest people in the office lately…

Matt Glazer:
Yikes.

Reese Harper:
As he continues to uncover some very insightful things for us as we trudge forward in building Elements. So welcome again.

Matt Glazer:
It doesn’t make me a doctor, but I appreciate the sentiment.

Reese Harper:
Well, and maybe doctors aren’t the smartest people anyway. That’s just a stereotype that… I’ve always wanted to have that in front of my name, but probably not gonna arrive at that. Some of you listeners out there are probably proud of that PhD that you got yourself in finance, so thanks for joining us everybody today. And Matt and I are gonna pivot into a very interesting topic, at least for me. Matt, yesterday I sent you just a blog post that I’m gonna be publishing to my advisor Substack. For those of you who haven’t joined it, love to have you there in the conversation. Just go to theadvisor.substack.com. At least that’s what it was yesterday.

Matt Glazer:
You got that URL “The Advisor?”

Reese Harper:
Yeah, yeah, yeah.

Matt Glazer:
That’s pretty sick.

Reese Harper:
Jeff… If you’re listening, though, and you go to that today and you’re like, “It’s not there.” It’s because Jeff Morgan is like… He might be changing it to reeseharper.substack.com, just because I started one for consumer and one for advisor, and I’ve been toying with different ideas. And I think he consolidated it maybe into one URL, so it wasn’t The Advisor.

Matt Glazer:
Is The Advisor [0:02:53.8] ____ Is that too pretentious?

Reese Harper:
I mean, I didn’t come up with it, the people did. [chuckle] And the limited amount of options that were available, I was like, “It could be The Consumer or The Advisor.” I was trying to pick from two. It just made sense.

Matt Glazer:
That seems pretty generic if that was available.

Reese Harper:
It was pretty… And it’s not very exciting either, but it’s been awesome to see how many people been subscribed, so. Anyway, tuning in in there, and we’re gonna be publishing… We’re publishing something this week that derives from a book written by a guy named Anthony Ulwick, who’s a consultant for a company he started called Strategyn, and his partner, Clayton Christensen, who’s passed away, who wrote and taught at Harvard Business School on this theory about how to complete different… How businesses complete different jobs for consumers. And I’m gonna tell Matt this is the thesis that I have, and I wanna get Matt to respond to it. But the thesis is that financial planning itself, the word “Financial planning” is what 90% of advisors go to market with or talk about when they’re interacting with their clients, “I do financial planning.” And then they add another little complicated word to the beginning, like “Comprehensive” financial planning. And the consumer doesn’t really know… The client doesn’t really know what financial planning is to begin with, and we add comprehensive to the beginning of financial planning. And now we have something that’s comprehensive on top of something we didn’t know what it was to begin with in the first place.

Reese Harper:
And my theory is that, if you look at AUM and asset management investment management like that, that’s a more clear thing that people have picked up on and continue to pick up on. They know that you get their money invested. But when it comes to knowing that they need financial planning, it’s quite vague, and honestly doesn’t inspire a lot of people to take action. And that’s evidenced in the fact that most of advisors still aren’t on subscription models. The less of the industry is actually charging for planning more as charging for investment management. They bake in planning into investment management fees. My thesis says, if we could break it down more clearly into what Anthony Ulwick and Clayton Christensen are calling “Jobs to be Done or job maps and desired outcome statements,” which is what the client would say they’re hiring you for to complete a particular job that… And we’ll give you guys some examples of that during today’s episode.

Reese Harper:
But my thesis is, if you could just break the service down more, Matt, into these component jobs and talk about the job specifically, clients would be more likely to be interested in your service than if you just call it “Financial planning” and don’t expose the underlying work or jobs that you’re going to be doing. What are your thoughts on that general thesis?

Matt Glazer:
Yeah. I think we do pieces of this. We don’t complete the full picture, which the problem is. I think a lot of people would argue. Well, I do have a process and I put it on my website. There’s a discovery meeting and a get-organized meeting and a review the plan meeting and then implement the plan… I think people spell out a process, and they feel like that this is successfully communicating to the client what we do. But I think I tend to agree with you that that’s not specific enough, that telling people, “We’ll review your savings plan,” is candidly not specific enough in many cases.

Matt Glazer:
At the end of the day, most consumers still think that we do their investments, right? There’s a severe misunderstanding or mis-education in what the difference between a truly holistic and comprehensive financial planning engagement is versus what traditionally is thought of a financial advisor.

Matt Glazer:
So I think it would… It’s… I think it’s really important to get really concrete with what we do. And I’m not advocating, Reese, for going to our websites and listing out 100 really specific things we do, I think like the other half of this is the thoughtful packaging and arrangement of those things in a way that as a consumer I can rationalize them and understand what they really mean in a way that I can translate it to my own life. But it’s definitely… The structure we’ve kinda put out there today and putting a… Laying out a process doesn’t go far enough, it’s not specific enough to the average person for them to take what is otherwise a leap of faith in going into relationship with an advisor they have no previous relationship with.

Reese Harper:
You gave an example in your conversation, you’re like, “Well, we have this kinda generic process discovery meeting,” but that’s not… If that’s the first thing that a client sees when they’re… When you say, “This is what I’m gonna do with you,” they’re not hiring you to complete the discovery meeting. No one wants… No one will be like, “You know what? If I could just get a discovery meeting, it’d be great.” That actual step in your job map of your job, there’s small jobs that you can kinda define, and then there’s a macro-job. And if the macro-job is deliver a set of advice that takes into account your entire financial life, if that’s kind of a macro-job in the past, maybe we’ve been calling financial planning, which by the way to me that’s not quite granular enough to stimulate action, but that’s an example of a macro-level job description, then discovery meeting would be one of the steps inside of that job map.

Reese Harper:
But you wouldn’t necessarily wanna expose that to the client, because the client’s not interested in… They are interested that you have a process and something to package. And I’m not saying don’t put discovery meeting out there, but a lot of times someone will look at your first thing in your process, they’ll see discovery meeting, and I’m just saying that’s not the job they’re trying to get done. They’re… They… If you’re trying to get the job of deliver a comprehensive set, let’s say of recommendations on your entire financial life, and that’s the way you chose to describe it, that’s what financial planning is at a high level, then what they’re interested in is what we ca… What this book Jobs to be Done would call a desired outcome statement or benefit to them. What… Why are they gonna hire you to do that? And it’s… I think it’s just important to get clear on the difference between these two things, a job description and then a client’s desired outcome or benefit that they wanna get out of hiring you for, that job for.

Reese Harper:
And Matt and I were toying around with a couple of examples, and so we’ll give you one today that’s more of a granular job. So let’s tell… Let’s say that a client… Let’s say a job description would be as simple as I’m going to… This is something for your own internal use, okay? This is not what you would tell a client, but this is you describing a job. “I’m gonna examine the qualified plans the… I’m gonna examine qualified plans,” okay, “for their suitability and contribution level.” So the way I’m framing that is that there’s a verb here, examine, and then there’s that every job is gonna have a verb to start it out with to point you in the right direction. Then you’re gonna have the object of that verb or the thing you’re acting on, what the verb interacts with, so in this case, qualified plans.

Reese Harper:
So, “I’m gonna examine the qualified plan for,” then you’re gonna add some context, and every job has to have some context, “for suitability,” each client’s suitability of each retirement plan type, “and contribution level,” I’m trying to like max or decide at least what the contribution level should be. So, “Examine retirement plans or qualified plans for,” and then add your context, “The suitability or contribution level.” That would be one example of how to write a job description. And that thing, you wouldn’t tell the client that in those exact words, ’cause that’s kinda like more for our own internal use as advisors to really understand and be specific about what it is that we’re doing. That’s one of many things that you’re going to do, that’s one of many jobs you’re gonna complete.

Reese Harper:
So if you tell a client, “Man, I do a bunch of stuff. One of the things that I do is for you each year, I’m gonna take a look at all of the possible retirement plan account options that have tax benefits, and I’m gonna determine if they fit your situation, if we need to make an adjustment that year, or also I’m gonna look at the contribution levels that you’re making and make sure I pick the right contribution level to give you the most benefit that year.” That’s a real concrete job description. I’m using my original job description of this verb then object, then a context to sort of write that out for myself, and now I’m using human language to describe it.

Reese Harper:
The client on the other hand now, they’re gonna say… Now, I want to… Now, as an advisor, if I were to ask my client like, “Do you think this job is important to you? Do you want me to do it for you? Would that… Do you want me to take a look at retirement plans and determine if… Which one you need and how much we should put in?” and you describe that, “Would you want to hire me to do that job?” Then you can kinda find out, do they value it or not? And then you say… Then you can list another job, “Do you value this one? Do you value this one?” And this is in a prospect conversation super-insightful, ’cause they can see that you really have a lot of things you do. And then the thing I’m always interested in to explore is asking clients how they would… Why they would hire me to do that. Tell me why you’d hire me to do that job? And their description, Matt, is always… That’s a different, that’s the desired outcome, that’s the benefit that we wanna document.

Jordan Haines:
A big challenge for advisors is delivering a consistent ongoing financial planning experience to clients, knowing what to do initially with a client is easy, but how do you consistently add ongoing value to strengthen that new relationship? The Elements Financial Planning System is centered on key indicators of the client’s financial health, and it gives you the structure you need to deliver ongoing value through financial planning. Start by evaluating key client financial data, then deliver timely insights that are both valuable and appreciated. To learn more schedule a time to talk with us today by going to getelements.com/meet.

Matt Glazer:
I wanna take it a little bit further, ’cause we’re getting into the real…

Reese Harper:
Weeds?

Matt Glazer:
The nerdy framework of Jobs to be Done theory. But you hit on one piece of this before, in that when typically people are hiring you to do a job that they’re A: Already getting done somewhere else and either it’s working, or they have shortcomings or they’re firing that job in place of you because of their shortcomings. So there’s a hire or fire decision here. I’m not typically hiring a person, a piece of technology, a whatever, to do something that I’m already getting successfully fulfilled somewhere else. I’m typically firing something in place of you. So really unpacking that with the client in terms of how… What are they doing today to address this job that’s working and what’s not working, and I think a lot of the times when you’re talking in the context of someone working with an advisor for the first time, it’s… They’re probably not even doing a lot of these things today, so of the shortcomings, there are none, I’m just no one’s doing this job for me today, so that tends to be a lot of the cases, but I wanted to add that element. There’s a hire or fire decision in here, and if you’re gonna be hired, they’re firing something else… [0:15:30.6] ____ job.

Reese Harper:
Yes! Totally! And I was on the phone recently, just yesterday actually with someone, and it was a customer of another financial advisor that I was just having a chat with about the software itself, and it didn’t have anything to do with hiring me. But I was describing this theory to them about what we’re trying to do with the software platform for financial advisors, and I just said, I threw out a job out there to this client, and I said, for example, I’m sure you do this with your advisor, but one of the jobs that we think is really important for a financial advisor to do is to… I said, we monitor the beneficiaries and account titling for the client’s estate every year. And right when I said that, this person just lit up and was like, “Oh my gosh, I’ve been trying to have my financial advisor do that for me for five years. And I was just telling my husband why are we paying all this money for… On these investment accounts? We like our guy, right… Doing a great job and they do a good job with what they do on this investment side but… This person,” she told me, could I download your software and find a financial advisor to hire that would just do that job so I wouldn’t have to leave my other advisor ’cause I don’t wanna make them mad, but I really want to get that job done. [chuckle]

Reese Harper:
I’ve been trying to get it done. I just don’t know if they don’t know how. And it was really fascinating to me ’cause I could have probably listed like… If I was trying to get that client right then, and this is a client that has a very large balance… Many, many, millions… And they’re older and unlikely to convert. Traditionally the switching costs of financial planning as you guys, all listeners know, is very high, retention rates in financial planning are high. But I’m pretty sure I could have kept digging and exposed all of the jobs that I do that their current financial advisor is not doing, and get her pain level to be so high, [chuckle] that she would be like… It just seems like I’ll consider it. And their current financial advisor, and these are like life-long friends, family, I may never be able to get her to switch regardless, but man, just feeling that I was just throwing out a sample and it happened to land on this very painful thing that had been neglected, and I just think that’s a real key in determining what to do with somebody.

Matt Glazer:
So you’re talking about the usage of jobs to be done, that framework in a… Effectively like a sales context here. Talk to me about the application, not in a sales context or a prospect conversation context, but in the context of, I’m now working with a client, how does the framework apply there versus…

Reese Harper:
Well, I’d like to hear you say that. How do you think it applies? I’ve been talking for a little bit today, so I wanna hear this. [chuckle]

Matt Glazer:
Well, I think it applies to the way you go about delivering your service. I think it dictates cadence, it dictates frequency, it dictates the ebb and flow of… Absent the client coming to you and asking for something specific or trying to solve a specific problem that they bring to your attention. Absent that, I think it dictates everything else in the relationship, and to the extent there’s structure, is to the extent there’s productivity and efficiency, and to the extent that’s absent, I think you lose those things.

Reese Harper:
Yeah, I’m gonna just share another reason why it’s critical in a service context, and you can tell that I can… It’s where, it only originates in a service context, without the service context, I can’t have that prospect conversation, the only reason I can have that conversation with her is because I know the job map, I know the job description, I’ve executed it a lot, and she can sense that this estate planning job that I was talking about, I had done dozens of times.

Reese Harper:
And so what ends up happening, though, a lot of times in service… In the service side of the business is, we don’t expose the job we’re trying to get done to the client, and therefore, they’re un-engaged. For all I know, that financial advisor could have been trying to get the client, this person I talked to, to get that estate planning job done. But the way they were interacting with the client was, “Hey. Can I get an update on who you’d like to be beneficiaries on your accounts?” Like, it might have been that.

Reese Harper:
Well, the client’s not trying to get that job done necessarily, that might have just been part of the job map of the entire job. The advisor needs to clearly state to the client, like, “Hey. I just wanted to let you know, like, this is the time of year where I want to evaluate all of your beneficiaries and titling, so that we make sure that your taxes are minimally impacted.” Or, you know, describing that context and contextual qualifier.

Reese Harper:
Because then, the client’s like, “Oh my gosh. Yeah, I wanna do that job. What data do you need? What data do you want me to update?” But we just, like, always request stuff from clients outside the context of the job, and the client doesn’t really know what we’re trying to do, we just seem like noise to them.

Matt Glazer:
Right.

Reese Harper:
And we’re just noise.

Matt Glazer:
It’s the “So I can” or the “Why” statement or the “Because” statement or “So that I can… ”

Reese Harper:
Mm-hmm.

Matt Glazer:
“So that we can.”

Reese Harper:
So that I can do this.

Matt Glazer:
Yeah. So that you can… Whatever.

Reese Harper:
But you… If you don’t have the job clear in your own mind…

Matt Glazer:
Mm-hmm.

Reese Harper:
And if you don’t… And the… And you don’t understand… For your own particular niche, your own particular customer base, you gotta know if this job is valuable. ‘Cause some jobs that… Some jobs are valuable for Dentists Advisors, like at my RIA. That’s… They just might not be as valuable for another practice.

Matt Glazer:
So, to… To put a cap on that point, I mean, I think it’s… I think it was clear in the earlier conversation why being concrete and more specific and with complete job statements, in a sales context, it can help sales, conversion rates, and everything in that part of the… The client side.

Matt Glazer:
Charging more? Yeah, justify more revenue? Mm-hmm.

Reese Harper:
But with the… With current clients, it’s adherence. Well, it’s engagement, and then adherence, and then execution, right?

Matt Glazer:
Totally.

Reese Harper:
Can we actually increase the efficiency and productivity just by being more clear, because there’s more shared understanding of what we’re trying to accomplish in the first place? Not a task in-and-of itself, but a task for a greater purpose.

Matt Glazer:
Yes, and… Or we’re just gonna keep leading with financial planning, and hope that people can figure it all out themselves.

Reese Harper:
Alright, folks. It’s been great. Another great episode. Thanks for tuning in, East and West Coast covered here. East and Mountain States, actually. So, thanks, Matt, for joining me again, and we’ll catch you guys next week.

Jordan Haines:
Next time on Elementality.

Beverly Flaxington:
You know, most people who do take some sort of a financial track in life, and for the large part of people who wind up in the advisory business, it’s a love of numbers, investments, whatever. This is not thought to be an emotional business, right?

Reese Harper:
Mm-hmm.

Beverly Flaxington:
It’s so nice ’cause it’s black and white, and the numbers add or they don’t. The returns are there. And yet, we absolutely know, right? From behavioral finance and everything else that it’s quite emotional, but I think there’s a hesitancy to admit it, maybe, and address it.

Abby Morton:
You can learn more about the Elements Financial Planning System at getelements.com/meet, and schedule a time to speak with one of our friendly financial planning experts. Elementality’s Executive Creators are Reese Harper and Matt Glazer. Elementality is produced by Abby Morton, and directed by Jordan Haines. Have a good one.

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