“Success breeds a disregard of the possibility of failure” – Hyman Minsky.
Complacency causes one to believe the end is further out than may be, and when the curtain closes the pain can endure quite some time. Current financial times seem to be no different. With markets remaining at all-time highs, presented employment and housing numbers strong, and interest rates low, for many the last call seems distant. This has caused planning, and more-importantly execution, complacency with many investors.
We are in extraordinarily complex times. National, geopolitical, trade, and market conditions lead many forecasters to believe the end to this bull market and manageable financial times are soon over. With U.S. and global debt on a juggernaut track and sovereign promises becoming harder to fulfill; planning is more essential today than ever before for households regardless of age, income or net-worth.
Remarkably, today’s platforms and products make it far-easier to execute financial strategies. The street affords excellent planning software, computer-driven investment models, ETF and diverse baskets of bonds and equities, and infinite content to gain insights and education. Unfortunately, this is mostly seen as consumer noise. Couple this noise with aforementioned complexity and an elongated bull market, and you get the proverbial deer-in-headlights consumer not willing to take any action.
As most readers will agree, it does not take much to prognosticate where this complacency will lead when the music stops. Now more than ever households need you to do what you do best; plan and deliver. You must set forth the path of urgency, and demonstrate the power of human financial advice coupled with carefully aligned technology.
We believe there are three commonalities that will differentiate desiring advisors in truly satisfying today’s complacent client:
Gain attention as a recognized leading source in wealth. This includes all areas of finance you specialize in, or are aligned with. Too often clients see financial professionals as isolated to one area of finance or another e.g., investment management or income planning. Be certain you, your firm, and your marketing materials exude all that you accomplish with clients.
Confidently communicate clients must complete, not consider, integrated wealth planning. ETF’s and robo-advising if used, are simply one portion of all that is needed within a client’s strategy. Ill-managed or do-it-yourself investors will likely be severely damaged without educated counsel.
Tactful vigor. With current market conditions and the ease in executing financial products today, client complacency can oftentimes spillover to financial professionals. Believing there is ample time to execute before the next bear market or retirement income period kicks in, may cloud the near-term need for action. Furthermore, fear of clients pushing-back or moving firms correlates to “accommodating advisory”. Even with open-source finance available today, you remain the expert. Clients are buying your expertise and guidance. Sometimes a more forceful hand is needed to demonstrate there is no better time than now to execute and maintain optimal wealth management.