Cannon Financial Institute

What do Client’s Want?

A conversation with Cannon Executive Chairman Phil Buchanan: Part 7 of 9

Before you start to build a team to help your clients, you have to ask yourself the macro question of, “what do clients want?” That seems an easy enough question to answer, but it isn’t. You, as the tenured FA, who is building the team, must provide an answer to give your new team members guidance from day one.   You don’t want each team member making up his own answer to this question. It’s YOUR team.

So, what do clients want? In 2015 the Consumer Financial Protection Board conducted a detailed survey of Americans across different income and demographic groups on how they viewed their personal finances.  Financial practitioners were included in the survey as well. This is their answer:  clients want financial well-being.

How is this defined?  According to the CFPB, “…financial well-being can be defined as a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life.”

According to CFPB, there are four elements to financial well-being which are common across all income groups.

  1. control over your day-to-day and month-to-month finances.
  2. financial freedom to make choices to enjoy life.
  3. capacity to absorb a financial shock.
  4. on track to meet your financial goals.

The CFPB report spotlighted this last point. “This fourth element came through strongly in the interviews and was notable in the variety of ways it was expressed. For example, financial freedom might mean being able to be generous with family, friends, and community; or having the ability to go back to school…or to work less to spend more time with family.  Because individuals value such different things, traditional measures such as income or net worth, while important, do not fully capture this aspect of the concept of financial well-being. It is these deeply personal preferences and aspirations that give meaning and purpose to the often challenging day-to-day financial decisions and tradeoffs we all must make to achieve it.”

Said Phil Buchanan, “in these interviews, I’ve made the point several times that becoming a more effective FA requires you to acquire a deep understanding of what your clients aspire to and not focus solely on what inspires them. When you are interviewing your clients or prospects, your number one goal is to discover in a specific way what their aspirations are. This requires a sure touch and gentle questioning.”

Phil continued by saying that once you understand how your clients define financial well-being with a keen focus on what they aspire to, building a custom financial plan for them isn’t time-consuming. Finding out the answers is what takes the time.

In order to be successful over the long term, Phil said, “you need to be gritty and intellectually curious. Advisors need to do more of the hard work of probing, understanding the basics of the lives of their clients which includes backgrounds, the source of wealth whether for an individual or a family and the dynamics of the web of interpersonal relationships within which your client lives.”

It is this level of understanding, Phil emphasized, which will allow you to become a thought partner for your clients in areas that have nothing to do with securities. 

To learn more about this topic, register for our Certified Wealth Strategist program of study.

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Contributing Writer: Subject Matter Expert Charles McCain

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