Financial planning beliefs that could hold advisors back

If as a financial advisor you’re not growing as fast as you would like, examine your convictions. A lack of clarity, both for yourself and how you articulate it to others, may be holding you back. It’s important to know what you stand for because, as the saying goes, if you don’t stand for something, you fall for anything. What you stand for is at the root of your actions.

In my firm, we’ll go through a discovery process with advisors to help them clarify their convictions. This is important because if you’re not convinced about something, you may lack motivation in some areas of financial planning. In our review, the advisors who want more progress and who look to break through limitations about what they believe achieve higher success.

Advisors’ limiting beliefs

One example of a limiting common belief is that permanent life insurance is expensive, and that term insurance is sufficient to provide the necessary coverage. We ask advisors if they would be willing to pay premiums for their term coverage to age 75 or 85, especially if they retired at 68 years old. This is usually met with resistance because they are no longer earning an active income. We then ask if they would be frustrated if they were unable to renew their term insurance beyond age 70 because doctors discovered a new medical condition. These hypothetical projections help them question their own beliefs and allow them to make a stand on these considerations.

Our library of questions is categorized into six broad categories we remember by the first few letters of the alphabet, ABCDEF:

  • Assuring one’s income
  • Building one’s wealth
  • Controlling one’s expenses (including mortgage, tax and other liabilities)
  • Distributing one’s wealth
  • Life Event planning (buying car/house, travel/wedding plans, childbirth, starting a business and so forth)
  • Cash-Flow planning (active/passive income, recurring/one-off expenses)

Without this clarity of conviction, advisors can fall into a space with clients where they’re not able to move a client forward with financial planning because they lack enthusiasm for the course of action they’re suggesting to clients and, in fact, may become more motivated by a clients’ negative beliefs. With this lack of enthusiasm for financial planning, how can you motivate clients?

Agree to disagree

There are times when clients’ own convictions differ from the advisors’, and it’s fine to agree to disagree. You don’t always have to align in terms of convictions. Clients may have different circumstances that led to their own convictions, and it’s important as a professional advisor to respect those different convictions. We can still take that space to share with them why we believe and what we believe, but we don’t necessarily have to get the clients to agree with us.

This is an important skill for advisors because sometimes people don’t like people who disagree with them. So, as much as we are professionals who give advice, we must respect the space the client is in. You don’t want to argue with clients because it won’t change their minds. Instead, it causes clients to disagree more. It’s a balance of being enthusiastic about what we can offer clients, while also understanding that not everyone will have the same views as you.

Chee Hong Gan, of Singapore, is a 14-year MDRT member.

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