The Role Of A Financial Advisor: To Serve Or To lead?

A career as a financial advisor is the best career in the world for the right person.

You have unlimited income opportunity. Nobody is in control of the size of your paycheck other than you. You don’t have a boss. You can manage your own schedule, decide when you work and which people to meet.

Best of all, you can have a profound impact on your clients. Finances are a core component of all of our lives. This means that you’re having conversations with people and helping them make decisions every day on something that really matters to them.

However, with this career also comes great responsibility. As an advisor, it’s important to understand the role you play in your client’s lives.

To Serve Or To Lead?

My belief is that your role is to lead your clients, not to serve them. You need to be willing to tell them what they need to hear, not necessarily what they want to hear.

This sometimes requires getting comfortable with the uncomfortable. It's having conversations that people don't usually want to have.

Who wants to think about what will happen to their family if they die early? Who wants to think about becoming disabled or sick to the point where they can’t work?

It's forcing people confront their own financial shortcomings and make decisions that have been difficult for them to make. But, they are decisions that are necessary, with long-term positive outcomes that vastly outweigh the short-term ones.

You need to tell your clients what they need to hear in order for them to accomplish their long-term goals. Even if it sometimes means forfeiting a relationship with a client and losing their business.

Conversely, serving the client means taking the client in whatever direction they want to go. For example, if I go in to a Nordstrom's and I want to buy a suit or I want to buy some shoes, I want that sales rep to serve me.

I want that sales rep to take me where I want to go, help me look at what I want to look at, and help me find what it is that I have in my mind.

A financial advisor can't do that. You certainly have to be in alignment with your clients. You have to ask great questions and follow up questions, seek to understand their story beyond just the financial numbers, and listen to them. But then you must lead them.

There's a big difference between leading and serving. I believe the role of the rep, the good rep, the one that's going to tap into their full potential is the one who leads their clients.

Leading The Planning Process

Let me give you an example that’s in line with my financial planning philosophy. Imagine you have a married 35-year-old couple come in for a meeting. They have a one-year-old child and a second one on the way.

The husband enters the meeting feeling as though he has everything under control. Since he was age 20 he has been saving money every month. He’s accumulated $150,000 in savings and, in his mind, he’s got it all covered. He enters the meeting wanting to discuss investment strategies to grow his portfolio.

Based on my financial planning philosophy, it’s of critical importance in both my practice and teaching that we address crisis management first with our clients, before wealth accumulation.

The basis for my philosophy is that clients who save for their retirement or children’s college education without addressing insurance needs are unlikely to realize their financial goals, especially in the event of an untimely death.

Conversely, if we start with life insurance and subsequently add educational planning and retirement planning, we follow a path that I believe makes clients nearly bulletproof.

That plan is designed with the intention that if they live long enough, they will accumulate ample money through planning, and, even in the event of death or disability, the family will be OK financially.

If that 35-year-old married couple is underinsured, an untimely death will likely financially ruin the lives or the spouse and the children. So, while it may be easier to talk investment strategy, addressing the survivor income and life insurance needs is the right place to start.

As a financial advisor, it’s up to you to guide your clients through your planning process. It shouldn’t change every time a new client walks through the door, just because the client has something else they would prefer to discuss that day.

You have to be willing to risk falling on your sword for something you really believe in. It’s not easy, but leading clients will give you far more confidence and professionalism in your career, which will attract more of the right clients to you than if you were simply a servant to them.


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