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 reflected on what we now call the Pickup Truck Pork Incident over the last two weeks as I was going through our prospect database. I wanted 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:
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 personal financial goals. Funding college, investment management and what to do with a legacy 401k were among a plethora of reasons people sought us out for financial advice. Even in the case of retirement – the most common reason clients came to us – there were a multitude of issues they wanted to cover.
A Triggering Event
Generally clients don’t wake up one day and decide that they want to work with a financial advisor; there is almost always some event that leads them to do so. The event might be related to money – like vesting of company shares or receiving an inheritance – or it might be a life event, like reaching “normal” retirement age, changing jobs, getting married or having a child. The clients might have several issues they are seeking advice on, but they haven’t take concrete steps to work with a certified financial planner until some key event occurred.
Most Clients Haven’t Worked With a Personal Financial Advisor
Clients might have run online calculators or performed some research to assess retirement readiness. Some have worked with a broker in setting up smaller accounts. However, few have completed a comprehensive plan prior to working with us.
Clients Usually Have a Good Financial Foundation
Most clients already have a good financial foundation when they began working with us. That doesn’t necessarily mean that they have a sizable portfolio, but it does mean that they are focused on making good financial plans and they don’t have to dig themselves out of a 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.
A Few Common Reasons to Switch Advisors
The number one reason clients sought us out was concern that their previous advisor was more interested in selling a product than offering financial advice. We have a few clients come to us because, although their previous advisor was fee-only, they focused solely on investments and didn’t provide comprehensive advice. Another surprising factor was politics. This has 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.
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.