Tag: advisor-practice-management

Plenty of quantitative measures support the oft-cited analogy between a financial advisor and a football quarterback. Football players view the quarterback as a leader on the field and in the locker room while investors look to their advisor for guidance and reassurance throughout the year. Quarterbacks call a play that fits the situation on the field while advisors help select investments appropriate for the client’s circumstances. 

A study released last year by Morningstar Behavioral Research took this comparison a step further by offering a quantitative rationale. The report sheds light on the significance of understanding behavioral finance, as well as the pivotal role emotional factors play in nurturing the client-advisor relationship.

I want to guide you through key findings from the study and provide insights about how you may be able to utilize this knowledge in your practice.

“So, what do you do?”

“I’m a financial advisor.” (Not true.)

“Oh, so you pick stocks?”

“Yep!” (Also not true.)

Anyone who knows me will not be surprised to hear that I read “Atomic Habits”…again. In 2018, James Clear wrote this remarkable book that has reportedly been purchased every 15 minutes since publication*. Additionally, his 3-2-1 Thursday newsletter is followed by more than 2 million people. Before I finish this blog, he will have sold a couple more books!

Why is it such a great book and so widely read and referenced? Well, he has organized dozens of concepts into a compelling approach to building better habits. It is digestible and actionable.

James offers hundreds of powerful quotes and thoughts, so it is hard to imagine implementing them all. But here’s one I find particularly compelling, which is relevant for financial advisors: “You do not rise to the level of your goals. You fall to the level of your systems.”

When I talk to executives and business owners as part of my work with family offices, private equity firms, and boards, I often hear comments like this: “I want to grow my business, but I do not have the time to address [you name the issue].”

The REAL issue is often that they are so busy working IN their business that they do not take the time to work ON their business. There is a tremendous difference.

Remember that episode of “Seinfeld” where Uncle Leo gets Jerry’s father a last-minute appointment with a top notch back doctor? And when Jerry’s father accuses the office of stealing his wallet, Uncle Leo is mortified since he gave a personal recommendation and asked the back specialist for such a big favor.

Although this scenario was from a sitcom, it is not far off from the view of the financial advisory world held by Mike Garrison, a business coach and best-selling author. In his just-released book, “Can I Borrow Your Car?” Mike highlights the importance of knowing and trusting both parties in a referral: who you’re referring and who you’re referring to. If you “loan” a key relationship out by making an introduction, you want absolute confidence the individual will come back to you without dings, dents, or scrapes.