The 3 Stages That EVERY Fee Based Financial Planning Practice MUST Pass Through in Order to Create Tremendous VALUE for Their Clients and Serious WEALTH for Themselves (Part 1) | FEE039 – Transcript

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So let me ask you a question before we get into the meat of this episode. Can you ever remember a time in this business when your frustration level was any higher? I mean, let’s call a spade a spade. The financial services industry is facing the most challenging times you’ve ever seen. You as a financial advisor are suffering through a totally skeptical and mistrusting public primarily caused by the avalanche of negative articles and reports of scandals in the media. And the resulting compliance panic at the home offices has made an already-tough marketing and promotion situation nearly impossible. Dealers and head offices, you know, the meetings they’re putting together are now deemed a requirement you know, when they ask all the advisors, they say listen, you’ve got-, you now need to get together for compliance meetings. And they have it a deemed requirement so they can share with you the new compliance requirements that you must adhere to, for fear of them dropping or the sponsoring of your license. I mean, it’s all-, it just seems to be a very fearful environment right now. It’s seems that in many cases dealers are now seeing a new revenue stream option for them by placing good, hard-working advisors on-, I don’t know what they call it. They might call it WATCH or whatever, and charging those same advisors a fee to do so. All motivated by the royal fear that the dealers have of the regulators, a fear that is usually reinforced for a finer suspension. I mean the regulators are simply-, it’s just a crazy environment whenever you get to talk to some of the compliance departments. You know, really a lot of what they are doing is just because they don’t want to be fined from the regulators, and so they just say well we’ve got to make sure we’ve got our oversight in place. And so as long as we’re monitoring things, if an advisor goes offside, then we can always say, well, we were monitoring it and we can catch that and if they do catch it then they are putting the advisors on watch and you know, it could be for the smallest little things. The little things that are just kind of, you know-, and oftentimes in the best interests of a client, but-, or it’s just making it very difficult, especially with familiar client requirements and that sort of thing. It’s just becoming more and more of a challenge for clients that are busy that maybe can’t get together with you, and so all of a sudden their accounts go offside. So it’s just very challenging for sure.

The regulators-, you know, they’re leading the charge in doing what they can to protect the public. I mean that’s the motivation that they have. They’re all there simply to protect the public. But in many cases they’re making it worse for the people that they’re trying to protect. Inundating clients with more paper is not solving the problem, but fuelling the distrust that exists by the public. The motivations of the dealers and head offices are not to protect the clients any longer but to protect themselves, and I have a real problem with that. You know, I just think being able to step back and take a look at the industry that it’s kind of going down the wrong path. I get the requirement for compliance. I get that, and I’m a real believer in-, I embrace good-quality compliance. But in what they’re trying to do and the way that they’re executing it they’re actually making it worse. So from every corner of the country and because of this medium, the podcasting, it’s really from every corner of the globe. I’m hearing stories of how hard it is to run your business.

I have one colleague who’s touched base with me. He said you know, I have very busy clients and my clients generally find it difficult at least to give me an hour a year. You know, they find that that’s very difficult. So really all I have to work with is an hour a year. And he said that I have compliance requirements that mean that when I sit down with that client who has a limited hour with me, it’s taking me 45 minutes to go through the compliance requirements, which is leaving me 15 minutes to actually have a meaningful meeting with that client to deliver my value and deliver my services, and to really show them and report to them on how they’re doing. He says how am I supposed to run my business that way? It’s just-, it’s not possible. The compliance is getting overwhelming. The dealers and head offices, they come back and say, well you need to reinvent yourself. You need to be able to prove your value and articulate it in such a way to justify all these embedded revenues that you’re receiving. And you know, this is what’s becoming very, very prominent now, is that there’s a lot of fee disclosure that’s going to be coming down the pipe, and so a lot of clients are going to be seeing what the embedded commissions were, or are, that their advisors are receiving. And so now the dealers are saying well, you need to be prepared for this. You need to be being able to articulate your value and showing your value.

The industry is working its way into a commoditized frenzy, and in my opinion they’re encouraging you to race to the bottom. They’re basically-, it’s just a race to the bottom. And as soon as you get a commoditized industry environment, everybody-, well how do they compete in a commodity? Well, commodities are all based on price, and so they just keep on lowering their price and it’s basically a race to the bottom. Embedded fees are being challenged, and in many respects, you know, this is a good thing. I mean I have no issue with that because I’ve never really liked the embedded fee model. I think it goes against what the industry is really going after. However, nobody’s showing advisors how to reinvent themselves. They’re telling them need to do it but they’re not showing them how to do it. The dealers at head offices are quick to tell you what you’re doing wrong but have no idea how you can do it right, because there’s no guide for that. And they just don’t know. They don’t have-, they can probably see some best practices from some other advisors but they’re not actually able to get into that advisor’s business and say here’s what the other guy’s doing, do this. Because that may not be a right extension of that particular-, for that particular financial advisor.

I mean, our businesses are unique to us, and so we need to be able to build our value proposition based on who we are and what we want to deliver for clients. So you know, new reps, the ones who us veterans-, and I include myself in that, and even though I’m a fairly young veteran, but the new reps, the ones who are supposed to be-, we’re going to pass the torch on to, they’re dying painful deaths in this industry on the backs of the fact that experienced advisors are seeing their incomes drop as well. And so seasoned veterans who have not embraced the idea that you must build a business and not a job are holding on for dear life for as long as they can. Just-, it actually goes back to the iTunes review and with the comment that was being made in that. And then they’ll retire. Those advisors are going to retire with very little to show for it. They won’t have anything that they can really pass on to the next generation, to their successor.

And so there’s a real problem here. Our industry can’t be built on this type of foundation. It needs to be built on a more solid footing where we follow the logic. Some people are calling for our industry to be seen as a profession. Now, I personally don’t think this will be possible. I don’t think it’s possible to actually get the financial industry to the professional status, you know, technically. But I think if we use that as a bit of a beacon for how to aim our profession, it’s not a bad idea. So at least it’s going to get us closer to it, but I don’t actually feel that we’re actually going to get there. And you know, I’d love to be proven wrong but the reality is there’s too many-, there’s too much of a headwind and there’s too many issues that we would face along the way, just because of the way the industry is kind of set up.

So let’s look at the medical profession. And let me ask you how this scenario would go over if it was ever followed in the financial world, OK? So let’s just go through this little bit of a story here. You walk into a doctor’s office with a stomach ache. You doctor says that he has come across this amazing medication that he wants to talk to you about that has shown to help with mental alertness. You tell him that your stomach hurts. He tells you that he’s done a lot of research on this mental alertness medication, and he feels that it would be a great solution for you to consider. So what does he do? He prescribes it to you and you take his lead. Your stomach still hurts but you also feel more mentally alert, you know, after having taken the prescription. Is that success? Well, let’s see. You went to the doctor because you had a stomach ache. You were prescribed something for mental alertness, which for all intents and purposes is a good thing. Although you still have a stomach ache. What if I told you that the doctor you went to wasn’t affiliated with a company that helped people with stomach aches? Which is why he gave you the best medication he had available to him, which was for mental alertness. Well, you’d be kind of frustrated. What if I told you that the doctor generated a commission for prescribing to you the mental alertness medication? You’d probably question his motivation for prescribing it to you in the first place. What if a few years later you found out that the mental alertness medication now had a side effect that nobody knew about before when it was originally prescribed to you? You’d be wondering at that point how much a lawyer would cost to sue this doctor for malpractice.

Now let’s look at how this situation could be fixed, because if we took that into the financial world, that’s exactly how our business with a commission model is done. You walk into a financial advisor’s office. They have a pre-set of products available to them that maybe are offered by the company, and it may not be the best product for what you’re looking for. Yet the only way they get paid is to make sure that they can find a way of selling you some of that product. In the medical world it’s called malpractice. In the financial world it seems to happen every day. So let’s-, how could this doctor have changed things? How can we change the methodology? Because obviously that’s, you know, in the medical world that doesn’t happen. It doesn’t happen in that way.

But let me give you this example. So you go to the doctor because you have a stomach ache. The doctor then reviews a full series-, or goes through a full series of questions with you to determine if it makes sense for you and he to be working together in the first place, because you only want to work with a doctor who can help you with a stomach ache. And the doctor only wants to work with you if he feels that he can be of service to you. So you have an initial meeting, you know, to do sort of a high-level review. And during that review, the doctor touches on some other items that he’d been that you know-, that maybe have been bugging you but you’d kind of learned to live with and you didn’t really pay too much attention to. But the doctor also touches on some other things that you didn’t even know you should be concerned about. And in other words, the doctor allowed you to learn about things you didn’t know you didn’t know. So you both feel that it makes sense, maybe. You kind of went there for a stomach ache but after having the conversation, you’re realizing there’s a more encompassing approach that’s being taken.

You know, you kind of both feel that it makes sense to explore the main issues that you came in to see; you know, your stomach ache, but you also look at some other things that may related to not only your stomach ache but to your overall health. Now the doctor sends you home with a checklist of information and says look, gather together all this information and bring it with you to the next meeting. I’m going to want to take a look at some of the details here. And then between that meeting and your next meeting, you receive a letter from the doctor stating, you know-, a letter from the doctor saying listen, I just wanted to go over with you and just outline for you some of the key things we talked about. Because I want to make sure that I’m clear about what it is you came in for. And I want you to be clear as well about some of the things that I identified. So I just wanted to put that in writing so that we can be assured that we’re all on the same page.

How are you feeling right now? You’re sitting at home. You get this letter from the doctor, who you actually thought was kind of interesting, and now you’re just getting a confirmation letter saying, I just wanted to confirm some of the key points we talked about. You’re feeling pretty confident with the doctor’s approach at this point. So now you’re kind of really motivated to get back together with this doctor. So you show up for the next meeting with all of the information he asked for. And you review everything. You go through everything page by page. You discuss the main areas of your concern, which is your stomach ache, with the doctor. You also discuss some of the other areas that deal with your overall health, and you realize that there’s a high probability that your stomach ache is being caused by some of the other health issues that you either are facing or didn’t realize that you were facing. The doctor then indicates that they feel that they will, you know, pretty much be able to assist you with your stomach ache. But more than that, your overall health and wellness, because that’s-, by taking that approach it’s giving you a complete solution.

The doctor, then, presents to you a process that they would like to work with you through to ensure no area of your overall health is overlooked, and that not only your stomach ache is fixed, but your health is benchmarked so that you can monitor whether or not you’re getting healthier over time or sicker over time. This way you can make adjustments along the way to always ensure you’re moving closer to your optimal health as opposed to away from your optimal health. How do you feel when the doctor indicates that they can do this for you? And all you have to do is join their program that they’ve already outlined. And there’s a fee involved. And then you can get started. Basically you feel that as long as the value you’re going to receive is higher than the fee you’re going to be charged, you’re all over it. Isn’t optimal health really what you’re looking for?

This type of approach is a much better approach, because now, after going through the program, you’ll have a much better understanding as to why something might be prescribed for you. In essence, you’ll see exactly why you need a prescription. And your stomach ache is going to be addressed in the process as well. So you’re getting more than you ever thought possible, so why then, in the financial world, why do mutual fund dealers and securities dealers, why do they never show you how to do this? Well the answer is really quite simple. The product manufacturers are not advisors. They’re product manufacturers. And the dealers don’t know how to regulate advice. The clients, however, they want this type of process and they want to feel comfortable that the solutions they’re being presented and the ones that you’re recommending they implement are indeed the right ones for them. And they won’t know that unless you’ve gone through a complete overall process. That is how good assessments and good high-touch value gets created.

But nobody’s telling you this. They’re all saying you need to be able to articulate your value. But they don’t tell you how to create value. Well I’ve just taken you through a bit of story on how I feel you can create value. So how then do we migrate our business away from the malpractice model of solutions before advice, to the advocacy model of advice before solutions? Well, how do we create a business that isn’t just a glorified job? And this is really one of the big things that we’ve got to build into this, because we’re not in business for ourselves because we wanted to create another job for ourselves. We actually probably in many cases left a job because we didn’t want a job. But oftentimes what people end up creating in this financial world is another glorified job. They don’t have a business. So how do we build true wealth for ourselves, not on the backs of our clients, but in conjunction with them. How do we work together to give them value for what it is that they’re receiving in such a way that the value far and exceeds the fees they’re paying us? That is what we’re trying to accomplish. Well, it’s really in my mind-, I’ve studied this topic for years, and I keep on studying it. I mean, I’m always evolving and adapting and massaging and doing things to our practice so that we can create more and more value. We continually create value. We’re really just like a value creation machine that we want to create for our clients so they always look at us and go my gosh, I could not imagine not being a client of yours.

So that’s where we’re coming from with this. So I found that there are actually three distinct stages that all fee based financial planning firms must go through to get to the top. And the stages are, Stage One I call the Building a Foundation Stage. Stage Two I call the Securing the Future Stage, and Stage Three I call the Scalability Stage.

So over the next few episodes I’m going to be taking you through all of these stages. We’re going to go dive into them pretty deeply, so put on your seatbelt and get ready because this is going to be fun ride.

So what is Stage One, you know, the building a foundation Stage? Well this is really-, this is your newborn. This is your baby. This is the starting point. It’s critical that you do whatever’s necessary to keep this alive, this building a foundation stage is when you’re just starting, you haven’t got really a business at this point. You’ve got an idea, you know what you want to do, and you’re really just-, this is your baby. It’s a brand new baby, and it’s critical that you keep that baby alive. It’s a baby, so treat it as such. Don’t waste time on things that don’t matter. You’d have a newborn and as soon as you have newborn start focusing on what university or college they want to go to. You don’t care about it at that point, because if you spend too much time on that, you might forget to feed them. So you need to focus on what matters to you at this stage. And as we go through these, don’t jump around the stages. You’ve got to go through them in a progressive state. Don’t go to Stage Two unless you’ve got Stage One done. Don’t even look at Stage Three until Stage One is fully complete and Stage Two is fully complete. If you do, you’re just going to get way ahead of yourself and it’s actually going to cause a lot of problems going down the road. So hopefully we can go through this in such a way, and you’re going to get some value from going through the stages, but make sure you stay on task, you stay on the Stage.

So let’s talk about the Building a Foundation Stage. So if you’re running marketing campaigns right now and you’re drawing a salary from your business and you know-, if you’re at that point, you’re not in the Building a Foundation Stage of your business. You’re in the Securing The Future Stage. But if you aren’t running marketing campaigns and you’re not drawing a salary from your business and you’re not having retained earnings left in the business and you’re not building and you have-, if you’re not at that point, you’re in the Building a Foundation Stage. This is your startup stage. It’s your idea-to-reality stage. It’s your fear and excitement stage, it’s your-, well what I call sometimes your harsh reality stage, because this is where the rubber meets the road, and now you’re kind of-, you’re in the trenches; I can’t put it any other way.

So at this stage, this is your startup stage. This is where you’re kind of boot-strapping your business. You’re not making any money yet and it’s critical you get through this stage as quickly as possible. You don’t want to spend too much time in this stage. If you do-, well let me put it this way. If you don’t get out of this stage you’re going to be learning the phrase ‘would you like fries with that?’ all too soon, OK? So I’ve found that those who keep their eye on the ball in this stage are the ones who make it through the quickest. It’s not a glamourous stage at all. It’s actually a stage that you just don’t want to be there very long because it does kind of suck. But it’s a necessary stage to lay the foundation.

In this stage, all you’re focused on is getting your value equation correct. You need to make sure the value you’re delivering to your clients is far greater than the price they’re paying for. This stage is all about you and your customer, because you and your customer are all that matter at this point. Nothing else matters. What is the price of your products and services? And make sure that the value of those products is greater than the cost to bring them to the market. So this is a tough equation. And I’m not saying this is easy and I’m not going to just sort of gloss over this. This is a tough time, because this is where you really have to bring yourself forward and really have to reveal yourself as to what you’re going to create from a value standpoint. It’s a tough equation to work out for most people. And especially if you’re migrating over to a fee-based financial planning model, the model that I propose, where you charge a fee for the financial planning process, and then you have a fee for your investment and oversight, and that sort of thing. You’re going to need to really pay attention here and really focus on this.

This is the one thing that all dealers and head offices are telling you that you need to do, but they’re doing an absolutely horrible job at showing you how to do it. The dealers at head offices have no clue themselves how to do it and that’s why they’re bringing in speakers and they’re bringing in people on how to do this, but the reality is-, I don’t know. Personally I don’t listen to anybody unless I know they’ve been in the trenches. And if they’re not doing it themselves and if they’re not a practicing financial planner who’s actually walked in my shoes, I really don’t have a lot of time for them.

That’s why I mean-, I’m actually just getting-, I don’t do a lot of business travel but I’ve actually got a conference that I’m going to be heading to, and it’s all-, it’s a conference. It’s kind of a mastermind group for sort of high-end financial advisors in the financial space who are kind of in the trenches but are leading the charge. And it’s sort of the latest and greatest, and so I was invited to be a panelist on the-, for one of the sessions because it’s some of the work that we’ve been doing. But you know, I don’t take that very lightly. I don’t take what people are saying to me. First of all, I want to know who these people are and how they know what they’re saying is right. Because if they aren’t practicing it, if they just got some great marketing ideas but they’re actually not marketing themselves? I mean it’s-, so many times I see people, they tell you what to do and then you get on their marketing lists and you realize, wait a minute. They’re not even doing what they’re telling me to do. And so they just don’t get it. They’re just trying to sell stuff.

Anyways, getting back to my point that the dealers in head offices, they have no clue on how to do it themselves. And so they’re bringing people in. So always question who they’re bringing in and say, OK, well, of this person, so they have a process that I can follow? Do they have something I can take away with right now and have they laid it out?

So that’s what I’m hoping to do for you to day with these different stages that we’ll go through. So the equation that they keep telling you to use is to-, that the dealers in head offices are saying is-, and I don’t know why they do this, but the equation they keep telling you to use to figure this problem out is to determine how much you want to earn in a given year. OK, so let’s you want to earn $100,000 in a given year. Then they say determine how many hours you have available to deliver your service, and then hour many hours it takes you to deliver your service to your client. And then figure out the math for what you need to earn per-, the purpose then-, this will encourage you to determine what the minimum case size is you should accept, you know, and what minimum policy size or whatever. It just seems to be backwards. In my mind, this formula’s totally backwards because it’s saying to you up front, well how much do you want to make? Well, I don’t know. I don’t want to limit myself, I want to make as much as possible. So why limit yourself at the beginning but putting a cap on your annual income? My answer to this question was always as much as I can, or that’s how much I want to earn.

So why then would I choose a number that could be too low? It just didn’t make sense to me. But I can see how it evolved to that because it probably evolved from somebody who was trading hours for dollars, whereas in the business world, you’re not trading hours for dollars, you’re trading hours for results. And those results can be as big as you want. So you do need to kind of turn the equation around and start with the value you’d like to deliver to your clients first. Make that as high as possible, and then find out what it costs to implement that and see if you can put a pricing structure in place that would make it work for everybody. Because believe me, the one thing I know is that people will pay for value. You just have to be able to show it to them.

So it’s really important not to get caught at this stage in the keeping-your-hands-busy syndrome. So I’d mentioned it earlier. You’ve got to keep your eye on the ball. Don’t spend time on your website. Don’t spend a lot of time designing your logo and business cards. Don’t spend a lot time with your automation systems. Don’t spend a lot of time keeping your hands busy on things that don’t bring you closer to your value equation. You need to figure out your value equation first. This is the most important part of this stage. If you don’t get your value equation right, you’re going to burn yourself out, and you’re going to burn yourself out of money, as well. It’s virtually impossible to get a return on your investment at this stage if you spend time on the things that don’t directly help you find your value equation.

So how do you focus on your value equation? Well ask yourself this question. What is your offer? What are you offering to clients? Now to answer this question, you need to focus on these two components: what’s your promise and what’s your process? So what’s your promise? One of the biggest challenges we as fee-based financial planners have at this stage is that we oftentimes aren’t able to narrow our offer down to one single promise, OK? It’s a real-, it’s probably the thing you’re going to have the most difficulty with. It’s just bringing down everything that we do into one promise. The problem is that we tend to do something different for every client when we first start out. We say, OK well I’m going to do something for this client, and then that client over there, they want me to do something else for them, so I’ll work with them on that. And then you continue to offer a different promise to each client, which makes it virtually impossible to get to the next of the three stages, let alone to the next client. We burn ourselves out doing something different for each client.

Now did you hear what I just said? Because it was important, and I’m going to say it again. We burn ourselves out doing something different for each client and then wonder why we can’t grow past a certain point. Most financial advisors will chase down every opportunity that find, which leads you to doing a different thing for each client. You know, there’s an investment opportunity over here, there’s an insurance opportunity over there, there’s a financial planning opportunity there. How on earth do you building a business when you’re doing so many things for each client? There’s no consistency in your promise, which leads to it being virtually impossible to deliver a consistent promise using a consistent process.

The problem you face at this stage is that if you don’t get a consistent promise, you can’t scale. So how do you solve this problem? How do you solve this stage? Well, focus on making the distance between your price, the price of your service and the value a client receives. Focus on making that as great as possible. You need to figure out how to deliver to your client, ten times the value for the price that they’re paying. You get this stage right and people will break down your door to work with you.

Here is what I’ve heard dealers-, and we just sort of mentioned it, but this is what the dealer head office model is suggesting you do. Figure out how many hours it takes to work on a client over the years, set your hourly rate and then multiply it by the number of hours it takes to deliver your service. This number then becomes the price you need to charge your client for your service in order comp-, to get you to that number. The problem is, you want the highest hourly rate in order to get your revenue as high as possible. But if you haven’t focused on the value you can deliver to your client, you’ll be charging a high price for a service that your client won’t value, which results in clients saying no more often than not, and you saying that this fee-based financial planning stuff just doesn’t work. Well, you know what? I know that’s totally false, because I know it works. I do it every day. So understand that the model-, just understand that it works. And it’s all because we’re backwards. So the dealers are just kind of promoting it backwards. So let’s flip it on its head and start coming at it from that perspective.

Now there was an interesting-, and I think this is a great quote if you’ve ever heard of a guy by the name of Paul Sutter. He’s the founder of Quantcast, and he’s hugely successful. I think he’s sold two or three business for I think the least of which he sold for $300 million dollars. So the guy knows what he’s talking about. Well he says that he wants his clients to say, I’ll take as much as you have when they find out the price of the product or service he’s offering. One of the investment counselors we work with, he has a very disciplined process he uses. And he ensures that when he goes through his process, he’s really looking to buy dollar bills for 80 cents. In other words, if I came across to you and I said listen, I’ve got this dollar bill in my pocket. I’ve got a whole pocketful. I’m going to sell it to you for 80 cents. How many would you ask for? As many as I had, exactly. This is what you need to do with the financial planning services that you’re providing.

So when you know that you can promise an experience to a client and you can use your unique process to deliver that promise, when you come cross someone who you know would benefit from your promise, you have a very high probability of closing that sale with that lead. I know when I meet with a business owner that I can explain to them what my promise is. I can show them the process we used to deliver that promise, and when I tell them the price for that service, there is a high probability, very high probability that they will anxiously find a way to do business with me. They will want to do business-, they will be asking, listen, when can I pay you because I want to get this started? And that’s kind of the experience that I have. So don’t forget that I’m charging no less than $2,000 for our financial planning services, so don’t tell me that this fee-based financial planning stuff doesn’t work. You just don’t have a good offer that has a great promise behind it, and a great process at a price that is irresistible.

So now, let’s take it to the next step. How then, or what can you do today to make your offer better, OK? So first of all let’s take a look at your promise, OK? We’re going to start with your promise first. What are you promising? So think about that for a minute. When somebody asks you, OK, what is it that you do, what are you promising to a client? What can you promise to your clients? Well it could be things like I promise organization or access to unique solutions, or higher-probability investment returns, or financial advocacy, or tailored solutions to a specific niche, you know?

What I want you to do is write out your promise. What out all the things that you can promise. Write out everything you do, and then add two words to then continue the sentence, to complete the sentence, and the complete the sentence. So here are the two words, so let’s say that part of your promise is that you promise organization, OK? So now what I want you to do is I want you to write on that piece of paper, organization so that, and then explain the ‘so that’. Finish that sentence. So with all those examples I just gave you, it would be something like, OK, ‘I promise organization so that, I promise access to unique solutions so that, I promise higher probability investment returns so that, I promise financial advocacy so that, I promise tailored solutions to a specific niche so that-, answering the so that part will help you paint a picture for your prospect so that they will be able to see the value that you’re bringing to them. See what I just did there? I actually used the ‘so that’ in that little phrase there. Answering the ‘so that’ question, or answering with the ‘so that’ will help you paint a picture for your prospect so that they will be able to see the value that you’re bringing to them. You see how that works?

So definitely take some time, even just push pause now. Take some time and start writing down, what do you promise? What are the promises you can make, and then finish those statements by saying I promise that I can provide you with organization so that, and then end it off. Then once you’re clear on your promise and why your prospect will value those promises, work on your process, OK?

So how do you do that? How to you provide-, how do you work on your process? Well, now ask yourself the question, take all the promises that you just laid out. So organization, access to unique solutions, whatever, whatever. Lay them all out and then right down the question-, or answer the question, how do you provide organization? How do you provide access to unique solutions? How do you provide higher probability investment returns? How do you provide financial advocacy? How do you provide tailored solutions to a specific niche? The how is going to drive your process. Write out the how you do what you do for each promise. You’re now building a nice story to tell your prospects to help you determine whether or not your services are appropriate for what they’re looking for. This is providing you with clarity on what you deliver and providing your prospect with clarity on whether or not what you do is what they’re looking for.

So take everything that you do and ask and answer this question. Once a prospect becomes a client, what is the first thing you’re going to do for them? So now you’ve gone through, you’ve got your promise, you’ve got sort of process of how you deliver those promises. Now close your eyes, take a few moments and sit down and say OK, somebody becomes a client. We’ve gone through sort of the initial stage. I’ve explained everything to them, they brought all their information in, you know sort of the multi-step process that I promote. So now they’ve said yes, I want to move forward with your services.

Once they’ve said yes, how do you deliver that? The answer probably has something to do with providing the clients with clarity. So how do you-, what’s the first thing you do for that client? Well, I’m just going to give you some examples here. The first thing we do is we provide them with clarity. So we gather the plan together and then we start-, you know, we put the plan together. So at the first plan presentation meeting, we basically are going to provide them with clarity on what they have done thus far. We’re going to provide them with clarity on where they are right now. Clarity on what I call their current foundation. How solid is it? How big is it? Will it support what they would like to ultimately building? Are there any cracks in it that they need to fix before you can build on it? I mean, you wouldn’t want a build a house on a foundation that’s got big massive cracks in it. You need to get those fixed first of all. Are there any materials that are no longer appropriate? Maybe they put the foundation in place and it was many years ago, and they haven’t really built on it since. They haven’t done anything since.

And then you get there and you realize, oh my gosh, you used some sort of a toxic chemical that was approved at the time but it’s not longer appropriate, so you need to get that fixed. So you need to give them clarity on all of that, all of the materials and everything. Is there structure? Is it even appropriate for what they’re trying to accomplish now? Maybe it was something they put in place when they were a lot younger and didn’t have any obligations or whatnot. But now things have changed. You need to give them clarity on their foundation. And that clarity on their foundation-, giving them that clarity, it goes a long way.

Many times clients say to me that they have no idea where they are at, and until they sat down with and I organized everything for them on one sheet of paper, and said OK, this is where you’re at. They had no idea, and they had no confidence that what they were doing was even close to it. They just had no clue. Life gets pretty busy and it’s amazing how easy this can happen. Heck, I know how easy it can happen to me, you know, keeping my own financial affairs in order is an involved process, and this is my business. I know that business owners, my gosh, if they’re not in the financial business and they’re running their business, they are so busy that I know their other financial affair are pretty much in a tattered shape. So it’s kind of a dog’s breakfast. So that’s where we can provide a tremendous level of value by just saying to them, let’s just clean this up. Let’s give you some clarity on where you’re at, OK?

So that’s kind of the first step in that process. Then you can present solutions that will make the foundation stronger. So maybe you need new foundation materials. Maybe he needs new waterproofing materials to protect against the leaks in your foundation or whatever. You know, maybe you need to gain access now that you’ve got a bigger foundation or you’ve got more to work with. Maybe now you can access to purchasing supplies at wholesale versus retail, you know, instead of just going to the big-box stores, you can get a wholesale contract or a wholesale agreement in place. You know, there’s just more that you can get when you need more. I know of times when I’ve gone to-, I’m thinking of a barbecue is coming to mind, for example. You can go to a big-box store and walk in and say, OK, I need a barbecue, and oftentimes there’ll be a big box that you have to put in the back of your car and you take it home, and you assemble it. Or, you can go to a barbecue specialty shop and order that barbecue. You know what? You may even pay a little bit more for that barbecue, but they’ll deliver it fully assembled.

To me, that’s a tremendous value. It’s actually cheaper for somebody to assemble it because I don’t have the time to do that. Now if you like doing that, fine. Go do it and-, but to me I value that. So I’m willing to-, I put more value on a higher-priced barbecue that will come fully assembled than I do going to a big-box store and getting a discount, or a discounted barbecue that I have to assemble myself. And that’s just what’s important to me. Then you can, you know, by making those-, you can present solutions that will make the foundation of their situation much, much stronger.

OK, so you wouldn’t want to know that your foundation has got cracks in it and you haven’t dealt with them, if you’re really focused on building on that foundation. You want to make sure that foundation is all totally solid. So then what you can is you can say, OK, well now you can map out what you do in stages. And you can say OK, well I would first of all give them some clarity. I would-, Stage One might be I would review where they’re at today. Then you might go to Stage Two and say OK, then I’d review their areas of concern. Then I might go to Stage Three, which might be establishing what the solutions need-, what solutions we need to accomplish. So what do-, you know, if we need to put investments in place, what do we need those investments to do for us?

Before we even look at what investments to choose, what do we need those investment solutions to do for us? That might give us some insight as to what investment solutions to begin looking at. So we need to know more about what we need to accomplish first. Now that you know what you need your solutions to accomplish, then what’s the best way of implementing those solutions? Do we go and we guy a barbecue that we have to fully assemble that we’re probably never going to get to? Or do we have one that comes fully assembled? So what are the best ways of implementing those solutions?

And then you want to implement them. Once you’ve gone through and done the research and review, and you maybe had meetings with the investment manages, and whatever happens to be. Or you’ve taken a look at the insurance solutions and you know what you need to accomplish. Well now you need to do something. You need to implement it. So implementing the solutions is maybe the next Stage Six here. Maybe Stage Seven then is review-, once you’ve done all that and now everything is done, now you’re going to go through a review and monitor phase, where you review and monitor the progress of the plan, make sure that it’s on track. The next stage could be making any fine-tuning adjustments. So there’s a lot that you can do.

And so if you can map out what you do and take yourself through the life of a new client over, say, the next 12 months, you can map out a really, really clear process that you can then talk to your prospective clients about, even your existing clients, and say here’s the process we’re going to go through. And this process is here to make sure that you don’t lose sight of what’s important to you. Outlining how you do everything will allow you to then develop a bit of a schematic to use to explain your process. And you may have seen my schematic or you’ve seen some other schematics. Basically it’s just a little road map that shows in a picture form, here’s kind of what you’re getting. You can use mind maps; I think a mind map is ideal for this type of situation. You can set your mind map up, so when you’re delivering the process, and even discussing your process with your prospective clients, you’re going through a mind map with them. That may give them some really clear insight and sort of see that, wow, this is a really complete process. Design your own graphic image of the process. Anything you can do that will help you show the progression from one stage to the next so that the client can see that there is a beginning, a middle and an end will be hugely valuable.

You see, without the end, people oftentimes see a black hole. I know that’s one of my big challenges with the legal community. You know, you hire a lawyer and say, listen, I need a contract done. OK, well ideally the contract will have an end when it’s done, but getting to that point, OK, what are the different conversations we’re going to have, and how many are there going to be? And you know, so it takes away a lot of that stress, because I know every time I need to call my lawyer, I’m always wondering, geez you know, I just had a quick question. Are they going to charge me for that 15-minute phone call, or-, the answer is probably yes, but that’s their business model, but it-, to me it gives us some insight into how to potentially price your solution. Because if you know-, OK, by putting all this together, you want to encourage clients to call you. You don’t want them to question whether or not they should call you because they might be afraid of being billed for that call. So that might say, you know what? Then maybe I’m going to focus on an annual renewal fee or an annual fee instead of an hourly fee or instead of a per-incidence fee or something like that.

So if you can successful establish the value you deliver through your promise ‘so that’ phrasing, you will have in front of you of something great. Then, you can determine how much time it takes to deliver the entire solution and put your pricing on various stages. You know, this is why I recommend that you charge for the financial planning process. That first 12-month process that you’re going to walk a client through that you’ve just developed in your schematic and sort of all stages and the process, you should be charging for that, because there’s value in that. Then you charge for-, you know, if they say OK, I want to implement and I want to use the investment solutions that you have in place and whatnot, then you can have a charge that’s for the implementation and overset of those solutions. You can also when it comes to insurance. Now you know, in Canada, anyways, we don’t have a no-fee style insurance or a fee-based type of insurance. There is embedded compensation there, but at least by going through the financial planning process, a client will truly understand when they need certain insurance and when they don’t. So you’re not having to sort of fit that square peg into a round hole anymore. Basically the client looks at the plan and from the discussion that you have, they’ll say gosh, you know, I would be concerned if something were to happen to me because I wouldn’t necessarily be able to continue this without some sort of protection. What would you have in mind? Well let’s talk about insurance. And they go right into it. Now they’re engaged and they want the solution in place.

So now that you have done-, what you’ve done here is you’ve created a program that your clients can pay to participate in. This program has nothing to do with the products you use to implement it. It has nothing to do with the products your dealer offers you. It has nothing to do with product whatsoever. The only product you’re promoting is the process you’ve created. You’ve now successfully what I call productized your service.

So there you have it. It’s just a complete process but it just-, it means kind of reversing how you do things. Don’t look at it from the standpoint of you know, how many hours it takes to do this and so you need to charge a certain amount of hours and you know. Look at it from the standpoint of what’s the value you want to create. What’s the promise you want to deliver to your client, and what’s the process you’re going to use to deliver it? Go through that and then come back and then put the price on it, because then you’ll know so much more about it. If you can get to this point, then you’ve successful completed Stage One, because now, once you’ve got this, you can now start to promote and market and talk to-, I mean it’s now something-, you’ve got something you can discuss with leads, speak about, you know, and sell prospects on in order to work with great clients who are motivated to work with you through the process you’ve created.

This will drastically increase your clients’ confidence and their decision in working with you and in referring to you. They’re going to want their friends-, I mean the referral set of things, when you go through somebody-, a process like this with somebody, they look at that and they go, wow, I’ve got to tell my friends about this. I mean they just-, it’s a natural progression because they want to look good in their friends’ eyes. And we know-, you know, you have talked about it in previous episodes about the whole referral idea, but this is how you build referability into your process.

Financial planning is the key. It always has been and it always will be. So building a financial planning process is what clients want to pay you for, if you let them. So get your Stage One complete, because this screwed-up economy is the best marketing opportunity I have ever seen. Most people are clueless about how to handle their finances, which means there’s a locked vault filled with gold that most financial advisors have no hope of getting without successfully completely Stage One. The Building a Foundation Stage is critical, and this Fee Based Financial Planning Academy that I’ve created-, you know, and I’ve talked about it in previous episodes and you can just go to to find out more about it. You know, in the Academy, we really want to get you through Stage One as quickly as possible. And that’s what we kind of focus on near the beginning. Stage One is where you can really make a business that is a true extension of you. And that’s why it’s important not to just look at somebody else’s business and say, OK, I’m going to do just that. Because that might not be a true representation of what uniqueness you’re bringing to it, what your passion it. Stage One is not about creating a job for yourself. Stage One is all about productizing your service so that you have a product unlike any of your competitors. You’re competition is always trying to bend and mould themselves into fit the current product-du-jour. You know, and I see it all the time when I have wholesalers come into our office, or we used to. We actually don’t let many of them in anymore because it was a waste of time. But they would come in and say oh, here’s a great new product and here’s something-, and they would just talk about the product. I’m like, OK, well how does that fit into my business? So that’s what your competitors are doing. They’re focusing on OK, how can take this product and mould it into-, or mould my process around it so that I can sell more of it?

Well, it’s completely backwards. You need to then create your process, go through Stage One, and once you’ve got your process, once you’ve completed Stage One, the Building a Foundation Stage, you’ll be well on your way to building a business that is worth a lot to you and even more to someone else.

So get out there and build yourself a better business.

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Copyright © Scott E. Plaskett 2013 All Rights Reserved. No part of this document may be reproduced without Scott E. Plaskett’s written permission.

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