In times of economic and market turbulence, the defensive posture taken on by the broader financial services industry falling under the scrutiny of client apprehension could be summed up in three words too often spoken: STAY THE COURSE. Umm…whose course?
The financial industry has done a better job setting its own course than seeking to understand yours. A brokerage firm, for example, sets its own course—its goal for customer acquisition and retention that will meet its revenue goals and appease shareholders. This, then, becomes the course they train into their brokers, who in turn aim to convince their customers (you) that it should also be your course. It’s not all their fault, but much like politicians, the financial services industry has oft proven its penchant for self-congratulation is eclipsed only by its instinct for self-preservation.
“Selling” your advisor
Of course, if you line-up silently in accordance with the prescribed course, you’re almost implicit in this crime of inattention. My foremost mentor in the realm of personal finance, Drew Tignanelli, taught me that because of rampant economic bias in the financial services realm (and just about everywhere else too), you as the consumer will often be forced to “sell” the practitioner seeking to serve you on your personal belief—your personal course.
The example Drew uses most often is that of a real estate agent: a good real estate agent is priceless, but because they’re compensated only if you buy or sell, it’s very important that you convince them—up-front—where you stand on the matter. If your realtor is convinced that you’re not willing to budge on paying more than [this much] for a house, the realtor will be less inclined to succumb to the wooing of the selling agent when he or she says, “So, do you think your client is going to budge? If we could get them up to [here] I think we’ll have a deal.”
Articulating your course is especially important when dealing with a financial planner or investment advisor. Most financial advisors are “Type-A” folks who don’t shy away from rendering an opinion on a prospective course and laying out the process for implementation. And, no matter how the advisor is compensated (fee-only, fee-based or commission-only)[i], they’re likely not going to be paid until your course is set (see more on how financial advisors are compensated by clicking HERE). Thus, they have a tendency to get there in a hurry.
Setting your own course
Of course, you’re unable to properly articulate your course if you have yet to determine it! Our lives are so busy, we often forget what we’re living for. I’ve created two exercises to help us stay focused on the most important stuff in life—you’ll find both by clicking HERE (or going to the Timely Apps tab entitled “Timely Apps from Chapters 1 – 4”). Take a look at the exercises entitled “Personal Money Story” and “Personal Principles and Goals.”
If you’d like to go deeper, I love having discussions about setting a deliberate course in life and would be happy to spend 30 minutes discussing yours. You can reach me individually by email at email@example.com; or call my office at 410-823-7283 and an associate of mine will set a time for a meeting in person or over the phone. No money talk; just life.[ii]
Then, the next time someone tells you to “Stay the course,” you can respond, “Whose course?”
[i] I’m not implying here that the method of compensation is irrelevant. To the contrary, it is very important. I believe the fee-only model, while imperfect, is the compensation model that reduces the conflict-of-interest (always present) to the lowest level. For more, visit the National Association of Personal Financial Advisors (NAPFA).
[ii] For a big step toward setting a more intentional personal course, check out Michael Hyatt’s blog post on the topic with an invitation to download his e-book, “Creating Your Personal Life Plan.” Michael is the Chairman of Thomas Nelson, one of the world’s largest publishers and a well-respected authority on living life on purpose.
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I’m a speaker, author, Head of Wealth Management for Triad Financial Advisors. Connect with me on Twitter and LinkedIn.