Many years ago, my wife, 6 year old cat and I made the move from Chicago to St Simons. It was a long journey – over 1,000 miles of driving – and we were exhausted when we finally made it to St Simons. After two days of driving, we had a yin for frozen yogurt, so we pulled into a strip mall with a TCBY.
As my wife and cat waited patiently in the car, I was on my way to get us yogurt when I was accosted by a man selling pork. Out of the back of a truck. I don’t remember what his pitch was, but I do remember the reaction of the ladies in the nail salon when he darted in and asked to borrow their credit card machine, and I particularly remember the reaction of my wife as we opened the back door to throw in small white boxes holding a grand total of 20 pounds of – I was told – USDA inspected top grade pork. The purchase was, in retrospect, not my finest decision.
I have had an opportunity to reflect on what we now call the Pickup Truck Pork Incident over the last two weeks as I have gone through our prospect database. I wanted to go through the database to understand the characteristics of those prospects that became clients and those that didn’t so that we could recognize who would be a good fit for working with us. Here is what I found:
There typically wasn’t just one issue – in most cases, clients initially contacted us because there were a couple of concerns they wanted to address. It might have been a combination of a need to fund college and how to invest an inheritance, or assessing the impact of a job change and what to do with a legacy 401k. Even in the case of retirement – the most common reason clients came to us – there were a multitude of issues clients wanted to cover.
There was usually a triggering event – generally clients didn’t wake up one day and decide that they wanted to work with a financial advisor; there was almost always some event that led them to do so. The event might have been related to money – like vesting of company shares or receiving an inheritance – or it might have been a life event, like reaching “normal” retirement age, changing jobs or getting married or having a child. The clients might have had several issues in which they had wanted advice for some time, but they didn’t take concrete steps to work with an advisor until some key event occurred.
Most clients hadn’t previously worked with an advisor – clients might have run online calculators to assess retirement readiness or worked with a broker in setting up smaller accounts, but few had completed a comprehensive plan prior to working with us.
But those that had switched advisors for a few common reasons – the number one reason clients sought us out was their concern that their previous advisor was more interested in selling a product than offering advice. We did have a few clients who came to us because although their previous advisor was fee-only, they focused solely on investments and didn’t provide comprehensive advice. Surprisingly, politics played a role in the case of a few clients. Their former advisors apparently assumed everyone thought as they did and that just wasn’t the case.
Clients usually had a good financial foundation – most clients already had a good financial foundation when they began working with us. That doesn’t necessarily mean that they had a sizable portfolio, but it does mean that they were focused on making good financial situations and they didn’t have to dig themselves out of a financial hole. Given the dire statistics about lack of savings for many Americans, that may seem surprising until you realize that if someone is contacting a financial advisor, odds are they have already made their financial situation a priority.
If you have considered contacting a financial advisor before but weren’t sure if it would be helpful to you, compare your situation to the list of traits above. If you see yourself reflected in one or more of the items, odds are working with an advisor would be a good decision for you — unlike my mistake with the pork salesman so many years ago.