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 October 22, 2012

Topic:  The ALMOST perfect client review meeting

As a financial advisor and business owner my team and I are continuously trying to perfect our craft.  There are so many things we do for our clients, however, if I had to boil down everything we do to the two most important I would say they are: continuously and consistently communicating with our clients and meeting with our clients face- to- face to review their needs and goals and the strategy we are implementing to help them achieve them.  We are continuously honing our systems to deliver that perfect client review meeting, which today, I believe, we almost had!

We met with long- time husband and wife clients today whom we will call, for the sake of confidentiality, Joe and Jane Doe.  I will get around to talking about the meeting itself, however, I should provide some background on this client relationship first, to set the stage. 

We have worked with the Doe’s for around nine years.  Initially, we developed a relationship with Jane who was the secretary for the owner of a local business who is a client.  We completed a comprehensive financial plan for Jane and her husband Joe and discovered that Joe had almost a million dollars in cash in his 401k with his employer.  Joe is very conservative and risk averse.  We continued to regularly review their entire financial situation over the years including Joe’s 401k which he was very hesitant to move when he left his employer and went into semi retirement.  This was understandable given the fact that it was right at the beginning of our last major financial crisis in 2008. 

We regularly monitor and review our clients’ financial plans and make recommendations to them.  Many of our clients simply tell us to go ahead with our recommendations.  However some, like Joe, really want to know our rationale and will request a meeting to discuss it.  Sometimes, out of laziness, I think, “We meet with them at least once per year already.  Why can’t they just take our recommendations when we give them and not have to meet?”  However, in certain situations, sitting down face-to-face as many times as the client wants is vitally important to doing the best for our clients AND for growing our businesses!! 

During one of our regular review meetings Joe mentioned that his brother retired and put his entire retirement plan into an investment which “couldn’t lose any money but would make money.”  I have been doing this a long time and, based on my experience, immediately knew what product Joe was referring to-- annuities.  I have never been a big fan of annuities because I think they are oversold by our industry to clients who don’t understand them.   However, being a full service advisor, informing our clients about products that we do not typically recommend is just as important as educating them about strategies we prefer  Therefore, we educated Joe and Jane on how annuities work and the different types that are available.  We provided Joe with the information he needed to make him comfortable moving his 401k and still recommended that he split the difference and not put everything into the annuities in order to maintain some product diversification and liquidity. 

This underscores the importance of meeting clients face -to –face in order to understand their mindset and, if necessary, to educate them so that they can become comfortable with their decisions.  That is what we do! If we give them the right advice based on their needs, everyone benefits in the long term.  Had we not met face- to- face with Joe and Jane and asked “What questions do you have?” at the beginning of the meeting they could have potentially gone to another advisor thinking that we were not able to advise them on annuities!

We met with Joe and Jane again today to review our portfolio recommendations.  We always try to begin each client review meeting by asking the client what questions they have.  This immediately turns the focus of the meeting on them and gets the most important things on their mind out on the table.  It ensures that we are covering what is most important to them. Invariably, no matter how much pre-meeting screening, fact finding and qualifying our team does to help prepare us for the meeting in order to maximize everyone’s time, the answer to my initial question of “Do you have any questions?” is typically NOT what we were expecting!  When I asked this today Jane said that she wanted to know whether they should buy their daughter’s condo.  We had no idea that their daughter was recently married and that they were considering buying her condo!  This is very valuable to us as holistic, comprehensive, full service advisors because ANY relevant information that we don’t know about our client’s lives is valuable information!  Does this have anything to do with stocks, bonds, mutual funds, standard deviation, asset allocation or any of the other things WE wanted to talk about?  No!  However, this was the most important thing today to our client and THAT is what we SHOULD be talking about! 

Whenever I get these types of questions, which have nothing to do with investments, it makes me feel AWESOME!  Why?  Because I know that when clients ask us these types of questions we have become much more than their stock picker or “investment guy” and more their “Trusted Advisor” which is what we aspire to become for all our clients!  There will always be another great investment scheme, product, or strategy and we cannot control the financial markets, however, what we can control is our service and our advice.  In my mind, being thought of as a client’s Trusted Advisor as opposed to their “investment guy” is the highest compliment a client can bestow upon us!

So what advice can we give a client who wants to know whether they should buy their daughter’s condo?  Was this part of the Series 7 or Certified Financial Planner exams?  No!  However, over the many years we have been advising clients we have had many who have purchased investment properties and we can relay to our clients (without divulging anything confidential of course) what others’ experiences have been, which is invaluable! 

Once we had answered their most important question to their satisfaction we were well on our way to the ideal client meeting and it had nothing to do with the investment portfolio we manage for them!  However, were we done?  Absolutely not!  Joe and Jane’s next most pressing concern was that they were paying too much in taxes and their CPA (who we referred them to and they loved) recommended opening and contributing to a SEP IRA for Joe and both their traditional IRAs.  This means additional assets for us to manage and it helps them reduce their taxes.  We both win!  They wanted to know how we would invest these funds.  However, Joe was concerned about the state of our economy, what the markets would do based on the Presidential election and the devaluation of our currency due to our country’s debt burden.  WOW!  That is a lot to tackle and a lot of concerns; however, this is why we LOVE this business and we rise to the challenge! 

To get Joe and Jane comfortable with our investment recommendations for their IRA contributions and the rest of their portfolio, we reiterated our disciplined investment strategy, and explained exactly how we make our investment recommendations using language they could understand.  Again, educating not lecturing!  We explained that our process is one based on the long- term that tries to mitigate short- term risk, which we have consistently done for them during many challenging times in the markets.  We demonstrated that through this process we do not need to guess how the Presidential election will affect the market or whether the U.S. currency will depreciate further but rather the market will tell us!  We also reminded them that by definition a “market” is made up of both buyers and sellers and the financial market is no different.  Any time someone is selling a stock or bond someone else on the other side has to be buying and they are buying for some reason. Jane communicated that she appreciated the personal custom approach that we take to the management of their financial strategy.  We ensured that they understood each step and got their 100% agreement to our recommendations.  Once we had explained and shown them, which we do every time we meet, they were fully comfortable with our recommendation, which gave them confidence in their plan.

After we fully cover each meeting topic or client question and are 100% satisfied that the client fully understands, we continue to ask if there are other questions, needs or concerns they have until they do not have any more.  When we asked Joe and Jane this after covering our investment strategy Joe said that one concern he had, which he said he knew didn’t involve us, was that he had to register for Medicare this year because he was turning 65.  This is another example of clients simply not being aware of everything we do!!!  We have lots of information on Medicare, and have researched this topic in depth, because so many of our clients will be affected by it!  This gives us the opportunity to be that “Trusted Advisor” once again, giving the client good advice and information for which we do not receive compensation!  We believe that if a client has ANY issues, whether financial or not and if we can help them then it is our duty to be of assistance!  We gave Joe a compliance approved informational piece that we have found helpful in educating people on the Medicare process and he was thrilled! 

After asking, again, whether they had any more questions, concerns or needs and them not having any we  then ask, “Is there anything else we can be doing for you or anything we can do better, more of, less of?”  To which Jane replied that they were thrilled with everything that we do for them as well as our high level of communication. She went on to say that they really enjoyed attending an educational seminar on Social Security that we held recently.  She said that she appreciated how we tailored the information to their level of understanding.  I think another significant value we bring as advisors is being able to take very complex, dynamic issues and communicate them to people who don’t work in our industry in a way that they can understand them.  This is not easy and takes years and years of experience and patience!

Joe and Jane left and we hoped that they felt as good as we did at how our review meeting went.  However, as the subject to this article is titled this was ALMOST the perfect client meeting and I think I am justified in saying this because I have completed a lot of client review meetings over many years.  The reason it wasn’t PERFECT is because we neglected to do one thing, which was to ask Joe and Jane, since they communicated that they are so happy with our services, if they are comfortable referring other people to us we can help.  I have been getting better at doing this; however, I do still forget to do it.  I think that, because we are so focused on the client as opposed to ourselves, which is the way it should be, that it is an easy thing to forget.  I do believe that it is un-professional, if you expect to build a long lasting premier firm, to neglect to ask clients for referrals.  However, in my learning and research I have found much better ways to ask for referrals which is to give the client specific examples of the types of clients we are looking for.  However, since we are currently honing a target market / niche strategy we are not yet ready to do this, but we will be soon!  At a minimum, however, we should AT LEAST ask them if they are COMFORTABLE referring others we can help to us because even if they are not this is information we should know and it at least puts the seed in their brain that they may know someone who could benefit from our services.  The disadvantage to this is that that “seed” usually leaves their brain the moment they step out of our office.  This is why giving them some specific examples of client types we are looking for (e.g., doctors, personal trainers, widows, etc.) will hopefully make this “seed” stay longer and gives them something specific to think about. 

White House Financial & Settlement Consulting helps families live easier and less stressful lives through the proper management of their financial resources.  We do this by acting as our clients’ trusted advisor providing a personal touch customized to the client’s needs!  Please visit our web site at for more information!

Disclaimer:  Diversification does not guarantee against loss, it is a method used to help manage risk.

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