BY GLENN CRAWFORD
I’m of the opinion that all too often advisors use confusing jargon to explain financial concepts that can’t be easily understood in layman’s terms. It’s one of the reasons people can be apprehensive and often have difficulty building trust with an advisor. An advisor is not unlike a great teacher. Isn’t the challenge to find a way to educate your clients even when the subject isn’t riveting?
I suggest you search your memory for experiences or analogies that can more easily educate your prospects and clients.
Which brings me to the subject of this article: I started playing football at an early age and attended college on a full-ride football scholarship. The game gave me so much more than the joy of playing. It helped build my character, my resolve, taught me how to work with others, take instruction and criticism, overcome adversity, along with the value of hard work and much more. Much of what I learned playing football can be applied to coaching clients in financial well-being.
As you know, one of the biggest mistakes made is that the great majority of people simply do not have a plan. Here are some lessons that directly apply to our business that I learned from playing football and observing great coaches.
HAVE A PLAN
There’s never been a great coach worth a damn who didn’t believe in planning. Coaches will stay in the office late at night planning. Heck, they’ll stay in the office all night if they think it will give them an edge. Why do they plan? Because they are looking for an area of opportunity to take advantage of or an area of deficiency that needs to be addressed.
When a coach plans, they take everything in account. They look at all their assets, all their weaknesses, they examine their goals, they are mindful of timelines, and they look at how all these pieces work in conjunction with one another.
Coaches believe that in absence of a plan, you are somewhat flying by the seat of your pants. You are leaving critical things to chance.
Further, great coaches know that constructive plans are dynamic, leaving room for the unexpected. A plan needs to be regularly reviewed and routinely adjusted based on what happens during the game. Developing a great plan is your strategy and changes you make during the game are tactics. But never lose sight of the name of the game — the goal is to WIN!
Speaking of winning, the difference between winning and losing can be ever so slight. It can be a matter of inches or seconds. Stay vigilant on your job. Your clients are expecting you to be on their team and to never be asleep at the wheel.
Let’s take it a step further. Leaders of corporations, leaders of militaries and political leaders all believe in planning and practice it.
So, here’s the question to ask your clients and prospects. If coaches, military leaders, political leaders, and leaders of corporations believe that planning is important, doesn’t it make sense that you follow suit? This is certainly the biggest game plan of a life, the one you only get one chance for, the one you must get right by applying the same tenets that great leaders subscribe to.
Corporations, businesses and countries will spend great time, energy and expense evaluating their performance. Like great coaches, they want to find opportunities to take advantage of and identify areas of exposure that need to be addressed. I scratch my head wondering why some people won’t even do it for free.
PLAY THE WHOLE GAME
Here’s another football analogy. What else do great coaches know about developing a plan? The plan must be for the whole game. Planning for the 1st half alone won’t get it done. A quality plan accounts for the whole game. Many of our clients are doing a great job of playing the 1st half (collecting assets) of their financial game. But very few of them have a game plan for the 2nd half of their financial game plan. Having a collection of assets at the end of the 1st half is not in and of itself an effective plan for the 2nd half: turning assets into the most predictable, most consistent, most ongoing income with the least tax implications.
PLAY OFFENSE AND DEFENSE
Advisors generally run in two camps. Some are heavy on investments like stocks, bonds and mutual funds. The idea is given certain projection expectations, you should have a pile of money at a given point in the future. The issue is, they provide no guarantees.
Then there are the insurance guys who say “put your money in insurance and annuity products, because they provide guarantees.” The problem is, insurance products have modest returns and don’t provide the potential upside found in investment products.
My football sense likens investments to offensive strategies and insurance products to defensive strategies. I was a fine wide receiver once upon a time. I wanted to throw the ball every play. In fact I wanted to throw deep every play. But even I know, defense wins championships. There has never been a great team that didn’t have at least a modicum of a stout defense. You need both a solid offense and a stout defense to win consistently.
Now if having a great defense works for every great football team, every great military leader, every corporate leader, and every leader of great countries, doesn’t it make sense that it would greatly increase the probability of winning a financial game plan?
Effective communication is one of the keys to success in all things. Advisors can create value for clients by communicating the importance of having a plan. If you aim at nothing, you’ll hit it with amazing accuracy. Learn how to set prospects and clients at ease by explaining things in simple terms. Search your personal and life experiences and see how many analogies you can come up with that apply to our business. At times advisors get so impressed with their own knowledge and training about finances that they overwhelm clients with superlatives.
GLENN CRAWFORD is a wealth asset manager, insurance broker, CDFA® & Mediator with Signature Resources Insurance and Financial Services. He’s also past president of NAIFA-Los Angeles. Glenn brings a coach-like approach to his advisory practice to help clients understand sound practices of financial planning. Email gcrawford@srifs.com Phone (818) 486-5053