I have been running a "quarterback" model business for the last few years so hiring me to do what I’ve already been doing BUT much better shouldn’t even be questioned. However, most clients I have on a AUM fee, discretionary agreement. I'd like to present a new "flat fee" discretionary agreement, with formalizing me as the Trusted Advisor. Do you have an outline of items recommended in the agreement or examples I can give my attorney to create one for me. AND should I use the Commitment to Hire part of the Financial Road Map® meeting to have them sign to commit?
We're not lawyers, so we avoid giving legal advice. My general advice is that your agreement should clearly indicate the amount of the fee and what they get. Your agreement should be signed by the client during Commitment to Hire and everything related to being hired should be completed before Commitment to Implement.
I have done my first few Financial Road Maps® and 2 people were adamant against recording the meeting. Should I press on without recording or politely disengage with this client. Any suggestions on how to address these concerns beyond the script?
It's HIGHLY unusual to even get a question about the recording, let alone someone being adamant against it. Therefore, my first suggestion is that you really consider how well you followed the script for opening a Financial Road Map Interview™. Your way of being is also important. The right way of being is coming from the place of wanting to do the best possible job to help them, which is why you are recording. Are you relaxed? When you are supposed to pause do you pause? When there is a question mark do you actually ask the question and not flatten questions into statements? If a person is reluctant for you to record, reiterate that you are recording in order to do the best possible job for them. If, after all that, a person still refused to let you record you are almost certainly dealing with a "don't trust anybody." The sooner you accept that and move on the better. It's your call whether or not you continue for practice.
How do we respond to someone when they say, "$7500/per year (our PMARR) is a lot of money?”
"As your new financial advisor, I would not recommend that you hire me if you could not afford me. I have no doubt in a year from now that you will wonder how you ever lived without me and feel that the $7,500 is a bargain. Would you like to get started?
Just received a mailing list from a friend and potential Ideal Client (600 names). He knows everyone on the list and attempts to cycle through and contact 2 per day. He is not an Ideal Client yet. I have given him a book, but not been able to get his wife to commit to a Phone Consultation or a Financial Road Map®. She was going to retire and the company just offered to retain her. When it settles, I hope to do a Financial Road Map® with them. In the meantime, do you have any thoughts on what might be appropriate to do with the names on his list? They're not Ideal Client referrals, but not totally random either. There are email addresses for about 20%, phone numbers for about 25% and addresses for 100%.
You don't need his wife on the phone to do the Phone Consultation. Proceed with him. After the Phone Consultation then you can worry about whether or not a Financial Road Map® is relevant for both of them. If so, work it out with him. Follow the process. There is no Financial Road Map® until after the Phone Consultation. Follow the process. Do one step of the process at a time. Follow the process. Focus on one piece at a time. Follow the process.
How can it be the same Predictable Minimum Annual Recurring Revenue fee for everyone if it's based on % of Assets/net worth?
It can't be. It can only be the same if you charge the same flat fee for everyone.
Do we set a fee and then reduce it for what we collect in advisory fees (% AUM )and then bill the difference?
No. You will no longer be the Money Manager, therefore you will no longer collect a money manager fee.
What if the amount they already pay just for AUM is more than the Predictable Minimum Annual Recurring Revenue?
They will be very happy to receive even more value for less money than they have been paying in the past. This will likely increase their loyalty to you and your refer-ability.
Clients agree to pay for their plan (and pay at the end of the first meeting) $5,500 to have their Implementation Plan written. My annual ongoing Ideal Client Fee is $11,800. Do I collect this (annual ongoing fee upfront) from them at the same first meeting or do I do it at Implementation Meeting?
You can do it any way you choose. Many advisors bill it quarterly and have it automatically deducted from an account, usually their money market account.
I have a relationship [developed last year - "pre-BAI"] with a senior person at the Major League Baseball Players Alumni Association that needs to be followed-up on. In fact, he owes me a call that I would like to preempt by calling him. I believe the Financial Road Map® experience, and the three meeting process, etc., could offer solutions to many of the problems voiced to me by not just Major League Baseball, but by others in professional sports [some of whom I may have access through people I know]. I need the words to use for my centers of influence [these with direct access to sports personalities] to get them to give me access to their constituents. This is not a situation for me to run a Road Map [they are not physically close] but one where I would like to get their interest to possibly invite me to meet with their Board and/or refer me directly. I need a script!
My answer will be similar to the answer to your previous question. Contrary to your point of view, I believe this is the perfect person with whom to create a Financial Road Map® experience. (Notice, I did not refer to this process as "run a Roadmap.) Your problem, in my opinion, is that you have the same "disease" infecting most FAs. (Don't feel bad. It's a highly contagious disease that inflicts almost everyone in our business. It's curable.) That is, you see some people as "centers of influence" who can refer you to others / "direct you to their constituents" instead of as human beings you can help by completing their Financial Road Map® and helping them get their entire financial house in perfect order and keep it that way forever by making smart choices about their money that are in alignment with their most important goals and their most deeply held values. Some of your Ideal Clients are well-connected people who can introduce you to lots of other people who can benefit from...
After completing the Financial Road Map® Interview with friends to help me get more experience, they decided to get a financial plan done. I relayed the cost of completing the plan, but not the cost of an on-going relationship (as I was unsure that was the best time to have that discussion being fairly new to the process). I am meeting them Saturday morning to have a pre-planning meeting. What is the best practice for inviting them into my Ideal Client community at this point and discussing the annual fee (I am thinking $10K...this would be my first Ideal Client invite)?
Your answer to your question is perfect. When it's time to tell them how much the ongoing relationship costs, just tell them how much it costs. If they have any other questions, just answer them directly and transparently until you come to an agreement to do business... or not. Remember, every time you answer a question you finish with a question. eg; Does that answer your question? Are you ready to proceed? How else can I help you feel good about your decision to hire me to help you get your entire financial house in perfect order and keep it that way forever?
For several years I have run an annual review program for all of my clients. As such this is something they have come to expect, generally around the same month each year. As I look to introduce the new world to them, including the values conversation, I seek assistance in terms of a script that clearly articulates the improvements to my service, as well as the road map conversation. For many years clients have received a circle chart and progress reports as part of my existing review process, so some of the ‘new world’ is something they will not perceive as added value.
I am keen to introduce Values-Based Financial Planning™ to existing clients, outline to them the new direction of my business and that I invite them to be a part of this. I am struggling with a script to clearly differentiate the added value of the new world to them.
Prior to their next scheduled review, as succinctly as possible, I would like to introduce the idea, outline an overview of the conversation we will have BEFORE we then run their standard annual review. Where clients realize the new world is for them, I would immediately slot them into the next space on my 3 meeting process schedule rather than run the review meeting.
Everyone else I am obliged to run the review meeting and put the exercise down as practice, complete the work that comes from the review meeting itself and then see them in a year’s time. Either way, I am not sure how to best articulate the conversation. Could you suggest some ideas for a script to help me keep on track and ensure I best communicate the added value?
In the "New World" you will get your entire financial house in perfect order and keep it that way forever, making smart choices about your money in alignment with your most important goals and your most deeply held values, so you have a 10 level of confidence that no matter happens in the markets, the economy, or the world you will achieve your goals. We deliver on this promise by providing 10 core client deliverables broken into a list of 143 deliverables checkpoints orchestrated by me, your Trusted Advisor, and supported by a team of best-in-class subject-matter-experts in financial planning, asset management, insurance, tax, and legal. We will meet 3x / in the coming year to get your entire financial house in perfect order. Each meeting covers different elements of the client deliverables and when every single action item is complete that's when you can legitimately say that your entire financial house is in perfect order. We will continue meeting 3x / year to make sure your...
Can you please suggest an appropriate scripted reply, when my clients (often happens in the Values Staircase™ Conversation) ask me, "Are you a life coach or counselor?” I’m looking for a response that has a yes but we are also so much more impactful i.e. a wow factor that’s compelling, succinct and all about them.
"Nope. I'm just a really good Financial Advisor who will help you align your most important goals with your most important goals."
I am having trouble with clients who seem to have no goals. So they are trying to answer questions they seem to have no idea about. I was thinking of creating a slide show similar to the one you did with us. "i.e. if you can see it you can be it" I myself found that truly inspirational and for me was then far easier to think big and open up properly. I was thinking of doing it before the values conversation to really get them in the right frame of mine about creating their ideal life. What are your thoughts?
I have several ideas that might be helpful for you. 1. Do NOT "create a slide." Values-Based Financial Planning is deliberately "low-tech." You want the focal point to be between you and them, not you talking while they look at a screen. And MOST DEFINITELY do not add anything to the front of the Financial Road Map interview before the Values Conversation! 2. Keep in mind that you are building an IDEAL Client Community. Ideal Clients DEFINITELY have goals without prompting and coaching. 3. Why would even a non-Ideal Client meet with a Financial Advisor if they have no reason for doing so? Those reasons are goals. It's especially hard for me to imagine, after a couple has just talked about what's important to them, that they draw a blank about the tangible things that want to have / do that require money and planning to achieve. Listen to your Financial Road Map® Interview recordings and pay particular attention to how well you are following the script. Perhaps something...
How do we have a conversation with clients who have already accumulated all there assets? The Financial Road Map™ questions are or sound like people still looking to build wealth?
Just follow the process. The Financial Road Map™ is definitely NOT only for accumulators. It was developed for people who are already financially independent and happens to also work with people who are still accumulating.
I would like clarification on the use of the Financial Road Map® in Progress Meetings. My understanding is that you are to prepare a new Financial Road Map® with the updated Goals and Current Value of Funds in the All the Money section. We are looking at whether there is a more efficient way of doing this, such as using soft copy that is updated at every progress meeting, given that the Goals and All the Money section are the only areas that are changed. Can you please set the record straight on how this is to be prepared for the meeting? We are trying to reduce any unnecessary work.
Someone on your team hand-writes the updated Financial Road Map®. It's more personal; high-touch in a high-tech world.
When should I NOT give an existing client a Values-Based Financial Planning™ book?
I can't think of a situation where this would apply.
A number of my clients do not involve their spouse in the financial decision making to the point where the husband (typically) wants to be the only one present. While I recognize that this process is more about values than it is about finances, the husband refuses to let the wife attend because she isn't involved in that type of decision making. Should I insist that both spouses be there knowing that the husband won't 'open up' if the wife is there?
Yes. Neither you, nor he, really know how about "opening up" until the meeting actually occurs. It's a very cool thing to watch a husband and wife relationship shift for the better due to you facilitating their Financial Road Map®.
I have been following the script with Commitment to Hire Conversation ™ and detailing them exactly what they will get. We had a Follow-Up Meeting the other day with a client where we do a Risk Profile (legal requirement) and they were asking further questions around money management etc. Although they knew they were getting a plan they didn’t realize we handled everything (i.e. professional money management) and they said if they realized we did so much they would have been far keener to go ahead. Should we also have a list of client deliverables to show them?
This is covered when you follow the Commitment to Hire Conversation™ script telling them, among other things, that you will tell them how to allocate their assets so they have the highest probability of achieving their goals when you summarize the for quadrants in the lower left of the Financial Road Map®. No, I would not have a complete list of Deliverables, but you might refer to the Deliverables Team illustration to be able to explain, GENERALLY, what key experts are used to help them get their entire financial house in order.
When I start discussing Values-Based Financial Planning™ to an Old World client, they stop and ask me why I am doing this since I already covered this when we first met. (In the past I would discuss what's important to them before discussing their concrete goals.) They only want to discuss the issues at hand. How do I handle this question?
You will say, "We are continually improving our client experience and our deliverables. Everyone gets a Financial Road Map® and after we complete your Financial Road Map® we will discuss how we will continue to do business going forward."
Powered by KBPublisher (Knowledge base software)