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What Makes a Portfolio Successful and the Rule of Two · The Perfect RIA

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  Amber Kuhn: Hello TPR Nation. This is Amber Kuhn. Thank you
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  for joining me on today's follow up Friday, where I'll be
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  recapping this week's episode highlights and action items. On
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  Monday, Matt and Micha were back to talk about investments, which
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  stems from a recent question from another advisor who asked
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  if advisors focus so much on investments because they can't
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  figure out how to deliver value in another way. Now, the guy
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  said investments do matter in that it's a large portion of the
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  retirement plan, but that there's such big focus on AUM in
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  the industry, instead of clients and heartbeats or value. But no
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  matter how fancy your investment portfolio is, you need to judge
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  the success of your portfolio, not only on beating the market,
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  but on your client's ability to stick with it. Also, they
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  pointed out that clients are always being bombarded with
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  messages of having activity in their portfolio, but you need to
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  remind your clients that your job is to do what's best for
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  them and their goals. Now during these client conversations,
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  Micah said you need to dispel the tax illusion and the market
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  illusion, where clients think that the S, P or Dow is a direct
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  return on their retirement or not, so he'll focus on his
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  client's benchmark, not the market's benchmark. Learning how
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  to communicate this and educate your clients is where you can
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  get a lot of return for your investment with your time,
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  especially when you're at conferences. The guys said to
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  ask how others are responding to client questions about the
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  market. Matt and Micah talked about how money is emotional on
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  so many topics, so you need to be able to build a plan that
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  meets your clients goals and that has the greatest likelihood
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  of them sticking with it. Micah will tell his clients that he
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  wants their portfolio to take the least amount of risk needed
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  to meet their goals. But with this, they talked about how it
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  doesn't mean that you're having a bunch of different models. You
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  need to have a core handful of models and know the lanes you
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  work in, especially so that when that next shiny object comes
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  along, you continue to keep your focus narrow, but also by
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  streamlining, you take into account how you can do this
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  upscale so tasty and missed Monday's episode, Micah said,
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  You need to pull up your investment account and your
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  contributions and see if you're investing the same way you
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  recommend to your clients. You need to be following your own
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  advice. You want to make sure that you're putting your money
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  where you're recommending it for your clients. You also want to
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  be able to experience things as your clients do, which is a
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  great way to learn what they actually go through. The guys
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  also talked about body language and how you're presenting
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  investments to clients. If you're not tuned into their body
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  language, that can cause you to lose some credibility. You need
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  to understand the difference between truly educating clients
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  and lecturing, and you need to empower your clients to solve on
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  their retirement and look at the things that they can control,
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  such as their spending habits. And you want to give them the
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  tools so that they stay invested when the market goes down. By
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  doing this, you're delivering value and not just noise. And
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  again, you want to have the best plan that your client is going
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  to stick with, mad mega wrapped up by sharing that whatever
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  investment strategy you follow, you need to be able to go into a
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  client meeting with 100% conviction that it's the best
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  possible investment strategy. Let's get into action items.
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  Your investment allocations need to be perfectly aligned with
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  your clients. So have someone else look at your investments
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  and if they don't match, make that change now and ask your
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  spouse about your financial plan and whether they know what it is
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  you want them to be involved and know what the plan is. On
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  Thursday, Jamie was talking about the rule of two and why
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  it's so important in setting you and your team up for home runs
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  with your clients, and how you can avoid losing clients and
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  setting your team up for success, Jamie kicked off her
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  episode by sharing how you do anything is how you do
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  everything. She shared a story about a fishing lodge where her
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  spouse is heading up for some time, and how there's a new rule
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  from the younger protege, who let their confidence trump the
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  prior expertise. But with this scenario, it was important to
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  remind the team that they committed to doing something in
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  that when you show up, you need to give it your absolute best,
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  but also, because there was a younger couple who was running
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  the lodge, that you need to give people an opportunity to
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  recognize problems and to collaboratively solve it
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  together. So with the story Jamie shared and how it connects
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  to not losing clients, she said that you have to be those
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  collaborative problem solvers and also not allow your
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  confidence to interfere with someone else's expertise on a
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  subject. So she then went into the role of two she admitted
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  that she used to dread doing this because it used to entail a
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  daily morning meeting with the entire team to review what
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  client interactions took place the day before, and while she
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  hated the meetings, she realized the importance of it, because
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  her father wanted to know who was contacting the office,
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  because the clients are how they're making a living, we
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  wanted to know if they were on the verge of losing a client,
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  and if they could do something about it. She shared a recent
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  situation where an advisor in their office lost a client, and
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  how they went back to review what happened. The client had
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  reached out a couple of times with questions, and the
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  operations team had responded. Now the answers were correct,
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  but what they realized was that those answers work what the
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  client needed. Instead, the advisor should have called, and
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  this is the Rule of Two, if a client asks a question two
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  times, you pick up the phone and call because something just
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  isn't connecting, and you don't want that back and forth. And
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  ultimately, if they're asking additional questions or reaching
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  out more than once, then they have an underlying question that
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  isn't being answered. Clients are hiring you for your
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  knowledge, your expertise, and especially for your ability to
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  offer concierge level service. They want someone in their
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  corner giving expert advice on the things that they don't
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  understand. It's that fear you're solving for and also
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  anticipating your clients need to make sure that they're being
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  taken care of. Now, with picking up that phone, it doesn't mean
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  that you're deviating from your processes or from your search
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  schedule, but it does mean that you become acutely attuned to
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  what the real questions are from your clients. Now in her office,
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  Jamie said that they have a lot of people who are interacting
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  and talking with your client, but it's not always the advisor,
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  and most of time that works, but there's going to be a small
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  percentage where it doesn't, and you really need to be paying
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  attention. So just consider what would happen if you just picked
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  up the phone to have a conversation and really got to
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  the underlying question that a client has, because it's about
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  value in connecting. And Jamie said, when you don't show value
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  and you aren't connecting with your clients, you're going to
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  lose them. Jamie wrapped up by sharing that, if you feel you're
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  losing clients more than you should, you need to use that
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  rule of two, and also don't allow your confidence to
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  interrupt someone else's expertise and make sure that you
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  learn from your mistakes. That wraps up this six recap. So TPR
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  nation, if you're looking for more resources, or if you have a
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  question, be sure to reach out to us at
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  lifestyle@theperfectria.com thank you for joining me, and
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  please share this or any of our episodes with another advisor or
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  team member who you think might benefit from listening and be
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  sure to subscribe to The Perfect RIA podcast so you don't miss an
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  episode until next time. Happy planning.