Roy Graham - Financial Planner
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Background
Roy Graham (not his real name) is a successful planner, generating about $350,000 in gross annual revenue. He's been in business for about 15 years, has a good business location, and has one full-time assistant.
Roy started his career as a life insurance agent, and gradually added securities to his product offering. Today he generates about 60% of his income from securities (mostly mutual funds and managed accounts). Unlike many planners, he still generates substantial income from insurance products.
The Problem
Roy describes himself as a financial planner, but has been concerned that because he doesn't do total financial planning, he may be misrepresenting himself to potential clients and become subject to compliance issues from his broker/dealer.
Roy doesn't want to change his product offering. But he does want to be in compliance - and he also wants to provide a complete financial planning service to his clients. Thus the conflict.
What Would You Do?
Roy has several options: Change the description of what he does; add planning services not now provided; or establish alliances with other professionals to fill in the gaps. What questions and/or suggestions do you have for Roy?
Our Plan of Action
- We asked Roy to describe what being a financial planner means to him.
- We then asked Roy to compare his answers to the chart entitled "An Organic Approach to Financial Planning (see below)."
The Gaps
Roy was surprised at the gaps in his services when compared to the guidelines for a total financial plan. Some of Roy's gaps were:
- Absolutely no discussion of property and casualty insurance
- No discussion of long-term care funding
- No discussion of health insurance
- No discussion of general liability issues
- No discussion of estate planning issues
Roy's Choices
Roy realized that he had three courses of action he could follow, based on the realization that significant gaps existed between his professed and actual services provided.
- Roy could acquire the appropriate professional certificates, acquire missing products and services, and beef up his knowledge of support systems in order to provide a total financial planning package.
- He could adjust his print/web/intro marketing material to reflect his actual services provided. In this case Roy realized that an accurate job title could be "Insurance and Retirement Planning Advisor."
- He could modify his Fact Finder to gather data about the financial planning issues he is currently overlooking. Using the information discovered in his revised Fact Finder, he could then refer his clients to other professionals for the issues he doesn't handle himself.
Roy's Insights
Roy learned that the root of his problem was the disconnect between a product oriented approach (insurance and securities) and a client centered approach. In effect Roy had to ask himself: "What is the product of my product?" His answer: financial security and peace of mind. This realization allowed Roy to modify his practice so that he described his services more accurately. Clearly in this situation, he was not providing total financial services.
Roy's Solutions
Having defined his problem allowed Roy to do 3 things:
- Rebrand his practice so that he accurately describes his services.
- Significantly modify his Fact Finder to include questions about issues he had previously ignored.
- Begin to develop relationships with allied professionals who can solve problems Roy was not trained, or interested, in solving.
Roy's Practice Today
Inquiring more broadly about all the relevant financial planning issues has allowed Roy to do a better job for his clients. They now get a thorough planning job due to Roy's comprehensive approach. This improved service has enabled Roy to forge relationships with other professionals which has made a significant impact on Roy's practice.
Referrals now flow both ways, Roy's income has increased, and finally, Roy's marketing effort has been reduced due to a continuous flow of referrals from advisors he is working with. The quality of these referrals is also better than his usual referrals because they are more targeted and better qualified.
AN ORGANIC APPROACH TO FINANCIAL PLANNING
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Are We OK? |
Is the Family OK? |
Is the Community OK? |
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1. |
Retirement Income needs
-- Income distribution
-- Non-qualified plans
-- Qualified plans
-- Employer plans |
Education Funding
-- 529 Plans
-- Other Funding |
Charitable Desires
-- Civic
-- Religious
-- Community Unity Groups |
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2. |
Long Term Care Funding
-- Using current assets
-- Long term care insurance |
Business Succession
-- Is plan in place
-- Properly funded
-- Key person protection |
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3. |
Spousal income needs
-- Life Insurance purchases
-- Spousal protection
-- Financial needs analysis |
Asset Protection
-- Divorce Financial Management
-- Liabilities Financial Management
-- Creditor Financial Management |
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4. |
Disability Income Protection
-- Proper evaluation
-- Adequate protection
-- Portability |
Estate Distribution Provisions
-- Tax liability
-- Special needs |
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5. |
Asset Protection
-- Investment rate of return
-- Inflation protection
-- Life expectancy
-- Standard of living management
-- Divorce Financial Management
-- Liabilities Financial Management
-- Creditor Financial Management |
Dynasty Concerns
-- Beneficiary Designations
-- GSTT |
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6. |
Property/Casualty Evaluation
-- Home
-- Jewelry floaters
-- Special needs
-- Auto
-- Umbrella policies
-- Replacement protection |
Estate Tax Planning
-- Up to date legal documents
-- Funding calculations
-- Funding plans |
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7. |
Identity Theft |
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8. |
Income Tax Planning |
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9. |
Health Insurance Planning
-- Yourself, spouse
-- Children
-- Employer based coverage risk |
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Nick is available to answer any of your coaching concerns, and as always, will provide a complimentary coaching session to anyone interested in pursuing a coaching program. Please call Nick at (510) 898-3245 or email him to set up a session.
Return to Newsletter Archives |
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Newsletter
Issue No. 9
August 2008 |
What business are you in...really?
One of the most vexing issues my clients face is describing their business accurately.
Some say, very directly:
· I sell life insurance
· I specialize in retirement planning
· I am a group insurance specialist
Others use a more indirect approach by saying:
· I solve estate transfer and liquidity problems
· I provide financial peace of mind by doing comprehensive planning
· I am a financial planner
The second approach reveals more of the outcome without initially revealing the specific products and services involved.
Either approach works fine, because it's not the specific words you say, it's how often you say them and to whom you say them. Of greatest importance is knowing, and being able to briefly describe what you do - and saying what you do - to the right audience.
This month we're profiling Roy Graham, who describes himself as a financial planner. But whatever you do, or call yourself, it's most important to follow three basic principles regarding your marketing effort:
· Know what you do
· Say it to the right people
· Say it as often as your sales goals dictate
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