I recently celebrated my 20th year as a regional director and I am used to getting many questions from advisors about my perspective on the market
, COIs and the future of this business
However, one question I do not often get is “What traits do you think an advisor needs to be successful in this business?”
I believe this question rarely comes up because many advisors believe there is one silver bullet that will help them succeed. It’s like when you ask your doctor what is the best way to lose weight and he advises diet and exercise and you really wanted him to say doughnuts and Twizzlers!
What is that silver bullet then? Advisors should know that the answer to the question is a simple, one-word reply. GRIND
If advisors want to be successful, they must GRIND
it out each and every day and for their entire career.
What does GRIND
stand for, you ask?
et up every day and put in the work
epeatable and scalable Investment Philosophy applied consistently
ndifference to clients who do not want help
ever give up on the market
evelop a financial plan for each client
In my experience, many of the best advisors reached success by being relentless and passionate GRINDers. Let’s look at each one of these characteristics in turn.
Get up every day and put in the work
Most premier advisors get up every day and love what they do and don’t mind putting in the time. I’ve observed that the best advisors consistently spend at least 2000 hours per year at work
. This allows them to be on top of the market and spend the required time to listen to clients and serve them well. For many advisors, these skills—particularly the listening—didn’t come naturally at first. How good are you at anything the first time versus the 100th time you prepare and practice? The best advisors I work with distinguish themselves by setting new goals
for themselves and focusing relentlessly on continuous improvement.
Repeatable and Scalable Investment Process applied consistently
ers I know have created a repeatable and scalable investment philosophy—and they apply it consistently. Why does an investment philosophy matter? Because it helps the advisor
In contrast, non-premier advisors’ lack of a repeatable and scalable investment process typically leads them to focus on products,
be more distracted and tempted by the latest hottest investment trend or spooked by market turmoil
, and face growth challenges because their product inventory
often is out of control.
Indifference to clients who do not want help
Of course, a large part of an advisor’s job is about caring for clients, empathizing with them, guiding them and helping them find solutions. However, knowing when to practice strategic indifference is also vital to a premier advisor’s psyche.
Clients who resist your help or do not see value in the service you deliver likely are not a good match. A premier advisor knows when to channel Jerry Maguire and focus on “Who is coming with me?” After all, time is your most valuable resource—so spend it on those clients who welcome a meaningful relationship. You’ll see your stress level go way down.
Never give up on the market
When I started in the business in 1997, the S&P 500® Index stood at 766.22 points. Just recently, it closed at 2,658 points. It’s not news that the S&P 500 Index has finished the calendar-year in positive territory 74% of the time since its inception in 1926. But how many advisors truly believe that you cannot time the market?
In March of 2009, I fielded numerous calls from advisors asking me if the S&P 500 Index could go to zero. If an advisor is thinking that, what are his clients thinking? I have been through the Long-Term Capital Management meltdown, the .com bubble bursting, 9/11, 2004 and the global financial crisis—and so have many advisors. But you know which advisors I observed shine during each of those uncertain periods? The ones who stayed the course with clients. Never underestimate the fact a decision not
to do something is still a decision to do something.
Developing a plan for each client
According to Charles Schwab1
, only 24% of American investors currently have a written plan. I firmly believe that that number needs to go way up. Many investors’ lives today are simply too complex not to be guided by a thoughtful, professional, long-term plan developed by a professional expert.
That premise then begs two questions:
- How can an advisor meet the needs of their clients without truly knowing everything about them?
- How can an advisor know everything about a client without doing a plan for them?
One of my favorite advisors sums up his discovery and planning approach for clients this way: “I want to know you better than everyone who does not share your last name.” An additional benefit of planning with clients: Clients who have a plan tend to stick with that plan and are more likely to reach their goals.
The bottom line
What does this all mean? If you want to be successful in this business you need to GRIND
. Each and every day. Because clients need you now more than ever:
- The average investor has not saved nearly enough for retirement.
According to the Economic Policy Institute2, the mean retirement savings of all working families is $95,776. The median is just $5,000. Investors between the ages of 56 and 61 are a little bit more prepared, but their mean savings of $163,000 are still meager especially if you consider that people are living longer and need their money to last them for longer.
- Market returns are likely to be lower going forward than they’ve been in the last few years.
The current U.S. equity bull market is the second longest and third strongest in history, as measured by the S&P 500 Index. At some point, market returns will soften and return to more historically typical levels. In that lower return environment, investors—particularly those who are behind on their retirement savings—will not be able to afford forgoing any potential return.
My twenty years in the business give me confidence that investors are much more likely to be successful in achieving their goals if they’re working with an advisor that GRIND
s it out every single day. Be that advisor for your clients.