A Tale of Two Fiduciaries

By Steve Ambuul, VP, Customer Development, Asset-Map

There are countless stories told about opposites colliding. One of the most popular is Dickens’ A Tale of Two Cities, which navigates London and Paris in the late 1700s. Other examples include the movie Trading Places starring Eddie Murphy and Dan Akroyd, or a story you might have read to your kids about the Country Mouse and the City Mouse.

Those stories all shine a light on the differences in lifestyle and circumstances between their lead characters and settings. Today I’d like to share a new story about stark opposites. One that compares a typical Client meeting conducted by an Advisor using Asset-Map to one conducted by an Advisor using technology created in an era when product sales ruled.

Situation One: An Advisor Using Traditional Technology

Bill is your average Advisor. He’s been in business for 15-years and uses plenty of technology in his practice (e.g. CRM, client portal, cash flow analysis tools, etc). He’s converted most of his revenue to AUM and financial planning fees, but his process for running meetings with Clients and prospects is still the tried-and-true method he learned from his mentor during his product sales years.

Bill’s first meeting with prospects entails him giving a presentation about his “unique” services, investment philosophy, and process. He expounds on how his independence and revenue model allow him to serve his Clients’ best interests. In short, this meeting is mostly about Bill selling himself and/or his firm to the prospect.

After Bill wraps up his presentation, the couple he’s speaking to, John and Mary, have some questions. But sadly, there’s not enough time to get answers.

  • Where are all of our investment accounts right now?

  • Do we have enough insurance on John? What if something happens to her?

  • What if we can’t get enough for our business when we want to retire?

  • What if our investments barely grow over the next decade? Can we still retire?

Bill has gathered only minimal information on John and Mary. He has some financial documents they’ve shared with him and they also brought a folder filled with a hodge-podge of financial statements numbering in the dozens.

There’s not enough time left for him to go through it all, much less explain how it relates to their goals and cash flow requirements. One of their most important questions: “What do we do if something happens to one of us?” prompts Bill to start extolling the virtues of life insurance before he’s even determined whether they are underinsured. John and Mary are becoming fatigued by the barrage of information from Bill.

Bill ends the meeting by asking them to schedule a follow-up meeting. John and Mary say that he’s given them a lot to think about. Then they leave his office, no papers signed, no closer to actually becoming Clients or understanding what tangible value he offers to their specific situation.

Situation Two: The Asset-Map Enabled Advisor

Marcus, like Bill, has been an Advisor for nearly 15-years. Unlike Bill, he uses Asset-Map to begin every meeting with prospects and Clients.

Before his prospects arrive in his office, he doesn’t require them to bring their most recent printed statements. He gives them a link to the Advisor’s Asset-Map portal so they can begin mapping out their financial situation prior to their visit. This makes the prospects feel in-charge of the experience.

Instead of beginning with a 30-minute pitch about his process and services, Marcus begins by handing out pens and paper copies of the Asset-Map to his prospective clients, Jordan and Lisa. He asks them about each of the investments, insurance policies, and other financial accounts they entered.

They notice the gaps he’s added to their Asset-Map and ask Marcus about them. This keeps the conversation Client-focused. They understand the numbers and, most critically, they own the numbers throughout the process. This is an important milestone in establishing Client understanding for purposes of meeting KYC.

It’s easy for them to ensure it’s accurate as Marcus helps them understand how to optimize it. Their entire financial life is summarized onto a single sheet of paper that they can draw on or a single screen that he can adjust on the fly. They don’t need to shuffle between documents while Marcus explains how Lisa’s annual IRA contribution impacts their retirement.

After they’ve discussed the Asset-Map, Jordan and Lisa ask the same questions as John and Mary, but this time they get answers right away.

  • Where’s everything at right now in our portfolio?

Marcus visually shows them on the Asset-Map who owns what, and how their various investments can work together to fund their future cash flow needs.

  • Do we have enough insurance on Jordan? What if something happens to me?

Because he has the information digitally, Marcus immediately runs a Target-Map to model the scenario. He shows Jordan and Lisa how much after-tax money Lisa will have each year if Jordan died prematurely. It looks like Jordan is a bit over-insured. Lisa, however, is woefully under-insured, especially since she makes considerably more than Jordan.

  • What if we can’t get enough for our business when we want to retire?

Marcus prepares another Target-Map for retirement planning. It intentionally doesn’t include Jordan’s business valuation, (they’ll discuss his exit plan separately), so that they can continue planning their retirement spending without selling their business.

  • What if our assets don’t grow as we’re expecting? Can we still retire in 10-years?

In real-time, Marcus drops their expected average rate of return to 4% to show their savings shortfall and how much more they would need to contribute each month to maintain their expected retirement goal.

At the end of this meeting, Jordan and Lisa aren’t sent away with a request to stop by the front desk and schedule a new meeting. This time, Jordan and Lisa end by saying “Let’s get started.” Marcus helps them set-up a systematic savings plan and fill out the required forms before their time together ends.

Marcus clearly understood their specific situation, answered their burning questions, and helped them take the first steps on their financial plan. He raised his value exponentially.

He didn’t pressure them or make promises. He didn’t forecast how he could increase their investment returns. Marcus asked intelligent questions to assess their current situation and cash flow goals instead of making a presentation about himself.

Jordan and Lisa’s financial situation isn’t a simple one. With a net worth of over $12 million spread across several real estate parcels, numerous investment accounts, and their business, they have a complex financial life. But that complexity is precisely the type of situation where an Asset-Map truly shines.

Average investors want their Advisor to simplify their financial life. Wealthy investors require it.

By putting their entire financial life onto one page, Asset-Map prompted insightful conversations. Jordan and Lisa then had the confidence to take action.

Winning More Business with Client-Centric Technology

Advisors who use traditional approaches for meetings with prospects rarely see prospects sign forms during their first meeting. If a prospect wants to get started right away, some Advisors don’t even have new account applications or transfer paperwork ready because they’re so mired in an outmoded approach.

A Client-centric process is more productive. It begins with using technology designed to know Clients better and open up conversations about their past financial decisions, their hopes, and fears. By using Asset-Map to assist with this process, Advisors can help more Clients than ever to make better financial decisions.

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