Slow Down to Speed Up
One of the most persistent conflicts I have with my personal clients and audiences I speak to is the objections I get to spending time during the work week, on a regular basis, for owners of financial services firms (and any business, frankly) to just think and reflect.
You have to be able to disassociate enough from the stress and drive of your business to be able to have enough space to draw connections on a more strategic and innovative level. This happens for me when I go fly fishing during the work week, as I have trained myself to disconnect from daily to-dos and instead get into a more flow state. Sometimes, it occurs when I am driving back to my home/office without any music/podcast on.
Perhaps you have noticed that while taking a shower or on a car ride without a podcast or music blaring, you suddenly came up with an idea and/or ‘connected the dots’ on a problem or challenge you were facing. You have more insights and solutions available to you than you realize and just need to give yourself the space and context to access them.
Slow down to speed up.
Cal Newport is a brilliant thinker and writer who has provided some amazing books that have reinforced this concept for me. The most recent one is Slow Productivity: The Lost Art of Accomplishment Without Burnout.
A common fault that is unnecessarily carried over after financial advisors become truly successful is multitasking and being busy. Earlier in our careers, we are compelled to survive and know that being ‘still’ is death…much like just standing around on the field is for a deer.
However, as our skills and experience grow…we need to make a shift to a different level of work if we want to both grow our business and enjoy it.
“The relentless overload that’s wearing us down is generated by a belief that “good” work requires increasing busyness—faster responses to email and chats, more meetings, more tasks, more hours..” — Slow Productivity: The Lost Art of Accomplishment Without Burnout by Cal Newport.
So many of my clients over the years have teetered (or fallen) on the precipice of significant burnout.
This manifests in many ways but is usually typified by a lack of growth and an inability to execute upon innovation. Too many of them are open to and approachable about new systems and concepts, but because of burnout, they are unable to lead themselves and their team into true change that is transformative in an enduring manner.
Newport has some encouragement:
“I want to instead propose an entirely new way for you, your small business, or your large employer to think about what it means to get things done. I want to rescue knowledge work from its increasingly untenable freneticism and rebuild it into something more sustainable and humane, enabling you to create things you’re proud of without requiring you to grind yourself down along the way. I want to prove to you, in other words, that accomplishment without burnout not only is possible, but should be the new standard.” — Slow Productivity: The Lost Art of Accomplishment Without Burnout by Cal Newport.
The direct application of this concept is found in the answers to these questions:
Your average annual revenue (AAR) per client
Your minimum financial planning fee per client
Your business focus: investment vs. planning
Burnout is guaranteed when you have a low AAR, as you will need to continue to add staff and time to service the continuous stream of new clients necessary to scale your business. That isn’t inherently bad, but let's tell the truth here: most of you didn’t get into this industry to have thousands of clients and dozens of employees. You wanted an exceptionally rewarding small business/career with a high quality of life upon achieving financial success.
The beauty of the AAR is that it is like the thermometer of your business.
A high temperature (illness) is reflected when your AAR is too low. That means the level of stress to your business necessary to drive increased profit and revenue is generally too high.
I am a proponent of requiring paid financial planning for any new and current clients for my personal clients (and anyone who will listen). There are many reasons why this is so, and here are a few:
The higher the fee, the more expectation of value from the client, which drives innovation and high execution from the advisory team. I love incentivizing performance by charging enough that you have to provide it.
The higher the fee, the easier it is to weed out prospective clients who are referred to you and can’t afford you. This way, you aren’t telling them that they don’t have enough money…you are helping them by showing them that it doesn’t make sense to pay you. Then, you can refer them to another solution (often saving more) and put them on an annual check-in plan…for a fee.
Complexity is where we have to make our stand in the financial services industry.
Whether you like it or not, AI is going to wipe out most of the value of investment management for the vast majority of investors. Yes, business owners and high-net-worth investors will always be inclined towards and often benefit from custom and specialized strategies/products…but that will rarely be the case for most advisor's clients.
If your strategy doesn’t deliver significant and unique performance over the ‘baseline’ indexed products with an accompanying high investment requirement…you are much better served moving your focus towards planning.
Planning that addresses complex and ever-changing issues is going to be where AI falls short and you can excel and reap the referral rewards of doing so. Clients, those who are inclined towards paying for advice, are going to want to feel good about what they are doing and will be willing to pay for it.
Thanks for reading this far and it's time to wrap it all up.
Making any improvement in the above areas is going to take time, and, ironically, some of that time is going to need to be spent quietly thinking and reflecting. This isn’t the kind of business where you can just do a quick search on AI and then change your business.
You are going to have to explore where you are right now and why you got there.
Then, you are going to have to think about where you might want to go and why and how that is important to you and your clients.
After that, you will then need to look at the process as a project and figure out a date in the future when you want to have made significant progress and then work your way back to present time, a small part at a time.
First step: get away from all distractions for an hour and just think. Take a small notebook and pencil and jot down notes as they come to you. In the beginning, I strongly encourage you to avoid using your phone for this…unless driving.
Thoughts?
I know that successful financial advisors face unique challenges as their career matures. My goal is to help people like you manage the transition from producer to successful business owner while enjoying life now. To learn more about how we do that, subscribe to Can I Borrow Your Car on Substack.
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