Firms take great pains to stand out yet
And more importantly than simply being uninteresting, leaning too far into it could come with a cost.
At a recent webinar hosted by the estate planning platform Vanilla, Erin Botsford, a former advisor who is now a coach and creator of the Elite Advisor Program, shared that rehashing the same concepts as the next advisor over, "is not our fault," she said. "It's how the industry was designed."
Rooting out the cause
The problem might stem from how advisors learn the industry, according to Botsford and Sarah Marriott of Vanilla. All advisors have to study and master the same essential concepts and terms. But what advisors may consider to be exciting or dynamic topics might not land with as much enthusiasm when presented to the clients across the table.
Marriott, who interviewed Botsford for the webinar, was a financial advisor for 10 years before joining Vanilla. Some firms still have a "little bit of an old-school mentality," she said in an interview with Financial Planning.
"The way a lot of people are still being trained, [is] where this is what they studied," she said. "So the advisor might know the market really well." Meanwhile, clients often want information with direct significance to their investments, not more market mechanics.
For advisors, "the reality is, you're supposed to be a generalist, you're supposed to know a little bit about a lot of things," said Marriott.
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The need remains
Advisors also might have nervous tendencies or prefer to avoid veering away from where they feel best prepared to talk, but avoiding it altogether is not a sustainable strategy. With fees changing and compressing, said Marriott, advisors will have to add value in other ways.
"A lot of times, it is having these more practical conversations that are going to be more meaningful to your client and memorable to them,
For the advisor, bringing up topics they might not be as well versed in or perhaps didn't study, such as the law, could be "a little bit scarier," said Marriott. But those that can get past it and know their strengths versus where they might need a little more help, "can pull in the right person at the right time, whether that's a manager for a portion of their portfolio, the right attorney or the right software decision," said Marriott.
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According to Marriott, Vanilla takes client facts and documents and then reads and analyzes the information. After that, it provides a list of observations advisors can bring to the client's attention. Advisors can then "point out any risks," said Marriott, citing examples like adult children listed without healthcare directives, outdated documents, or provisions invalidated by state law changes. The advisor can then "highlight where there is risk in order for the client and the advisor to best address it with the client," she said.
"When you're sitting there and meeting with a client, they're not going to remember if you're talking about [how] you beat the market by two basis points," Marriott added. "What they're going to remember is that you pointed out that they had this huge gap in their estate plan or their insurance that if we didn't fix it, was going to cost them a $2 million tax bill."
Advisors who are willing to tackle newer topics and bring in experts if needed can build better relationships and trust with their clients, according to Marriott.
"They want to know how you're thinking and that you're looking out for them, and they don't want to be passive," she said. Advisors "sometimes get questions where they don't want to scare people, they don't want to have those conversations either."
Confidence in these subjects won't just make the advisor stand out.
"Having a little bit less fear about taking on new topics will go a long way," Marriott said. "Your job is to have the hard conversations. It needs to happen."
