Ruth Sturkey believes even the most successful adviser is on the cusp of greater things. Here she explains how a cashflow planning light bulb moment changed her outlook and helped her business evolve
How you can change people’s lives through financial planning? For many this means a change in mindset from transactional advice to a more comprehensive, life-focused service.
You may provide a great client advice service already. Why change? Change is time consuming, unsettling and means you need to learn new things. You have a sound business; you are profitable; you have satisfied clients who trust you. What’s the incentive?
Evolution not change
I believe you are on the cusp of even greater success. I stood in your shoes at the start of my journey. I was successful, yet I felt disengaged with the constant stream of clients, products and transactions.
I was providing a service, but I wasn’t really answering the big life questions; have I got enough? Are my family and I going to be alright? I didn’t know how to answer such things.
My light bulb moment was finding cashflow planning and inspiringadvisers.co.uk. I started to learn that I could bring money to life by using cashflow planning. Cashflow planning coupled with the use of several thought- provoking questions started some truly rewarding client conversations.
My thinking and my business started to evolve. What if you could evolve your business to bring you, and your clients, a whole heap of positive benefits?
The place to start is with you
What do you want out of life? What does a life well lived look like to you? What do you want your business to stand for? Why are you doing what you are doing? Do you just want a job and a way of getting to 60 or 65 before stopping?
Or do you want a job that gives you more pleasure, deeper meaning and a buzz? A buzz of pride and satisfaction as you realise that you have the power to help clients lead a life that they perhaps didn’t know they could choose or achieve?
Financial advice solves a problem. Investment management helps someone grow their wealth. Tax planning may help someone pay less tax. Each are important. Rarely are these three activities life changing.
Coaching clients to articulate what is important to them about their money and their life is a skill. Most clients have never been asked these questions and really listened to. They are certainly not used to the financial services industry asking these questions.
Few people really stop and think about their life in this way. But, when they do, the answers normally encompass the following pillars of life: freedom, choice, security, time and the ability to help others. Once we know what is important to our clients we can then build a financial plan to make that happen.
Futureproof your business
Financial advisory businesses are under attack. Technology can build more efficient investment portfolios at lower cost than most of us. Business models will increasingly be challenged by algorithms, apps and robots. Much of what we might have traditionally done for clients will be commoditised.
Moving your business to a coaching-led financial planning business, where you ‘sell’ your clients their future is powerful.
Combine this with a structured annual planning process, where you revisit your client’s plan to ensure they remain on course, adjusting as necessary, gives you a solid and predictable business. Most people do not know that they want or need financial planning until they experience it; once they do they will not only be clients for life but they will be advocates for life.
Chance to master new skills
Evolving from advice to financial planning means new skills. These skills are likely to include listening, cashflow planning and coaching skills. There are many resources, videos, workshops and conferences available to help you learn and develop. There may be some initial costs as you evolve your business, but I encourage you to view this as an investment in you and your clients’ future.
Imagine how inspired and engaged your team would feel if they were involved in building and delivering on plans which helped to change lives. Creating a work environment that does good for its clients will help you motivate and retain your team. It will attract new recruits to your door.
Putting value into your fees
There is much debate about the right amount or method of charging; neither are the main issue. The key is the value your clients receive or perceive from their financial planning. You and your client can easily quantify the income tax saving for a higher rate tax payer on a personal pension contribution of £40,000.
But how can you quantify the value in:
• Giving someone confidence to go ahead with the renovations for her dream home, knowing it won’t impact her future financial security
• Showing a couple they can afford to give up the corporate rat race years before they had ever imagined it be possible
• Showing a lady approaching retirement that she can afford to take a sabbatical to go travel?
Believe me, if you change someone’s life possibilities, you are very unlikely to have any discussion about fees.
Build a sustainable, profitable business
Financial planning clients love the peace of mind that you bring to them year upon year. Loyal, life-long clients bring value to you, both in terms of your annual income as well as a future business value. It means you do not need to be constantly hunting for new clients. Do the job well and your clients will be falling over themselves to refer you to their friends and family.
An asymmetry of knowledge exists in financial services; on the one hand the financial adviser who knows exactly what their client should do to reach any given end. On the other, we have a client who has little idea of how to achieve ‘enough’ and will do as they are advised. We find ourselves in a very powerful position of influence. Use this power and influence mindfully.
Financial planning is about our client’s life and enables us to help and engage them in a way that even the most ethical, technical and product led service cannot. Advice may follow but only after and in support of the planning.
And what do our clients say?
This is the acid test. According to our clients, the real value of financial planning is not in saving tax or investment management although these are of course a big part of what we do to support the planning, but in the non-tangibles such as:
• Helping them visualise their future by creating their ‘Life and Financial Plan’
• Providing peace of mind
• Saving time (which they can never get back)
• Preventing expensive mistakes through financial coaching
• Being there as a sounding board
• Simplifying their financial affairs and keeping them organised
• Acting as a hub
• Providing oversight across various other professional advisers, such as lawyers and accountants gives them a seamless financial experience
• Providing ongoing education both for them and also their children resulting in multi- generational planning
• Being ‘the number on the fridge’; the second person their wife/husband/partner/son/daughter would call in the event of a disaster. I don’t think there is bigger compliment than that!
Our role as financial planners is to help our clients use their money to live the best life they can. Done well, not only will you earn a good living, you will feel a huge leap in purpose and job satisfaction. The two are not mutually exclusive. Do the right thing and success will follow.
Accelerate your evolution today, I can assure you that you will not be disappointed.
Ruth Sturkey is client director – London at Paradigm Norton
This article originally appeared on Professional Adviser on 10 January 2020.