Survival manual for trust and investment bankers

In 2007 Stephen Gresham wrote the original Advisor for Life: Become the Indispensable Financial Advisor to Affluent Families, which focused on aging Baby Boomers. His most recent book, The New Advisor for Life, offers many of the same basic but often missed pieces of advice that can help a banker to become, prosper, and enjoy the sometimes rough- and-tumble business of the financial advisor. However …

This update goes deeper into many of the items previously covered and includes factors Gresham, a veteran financial executive, didn’t cover four years ago. These include today’s environment of market losses, ever-changing technology, and new generations of investors who at times appear to be from completely different cultures.

 

Anyone with investable assets may be pursued by a wide variety of players--banks, brokerage firms, Registered Investment Advisors, insurance companies, accounting firms, and credit unions are the main ones--but the  chief  battle is for the opportunity to provide financial advice to the affluent. Not only is it difficult to obtain clients, but also to keep them over the long term, which may include multiple generations of a family.

A short but powerful list of principles for becoming and remaining an “Advisor of Life” is provided very early in the book. This listing describes why a client pays a financial advisor. According to Gresham one must be: available, concerned, informed, and also opinionated and inspirational. The book expands on these basic characteristics.

The book is quite detailed in illustrating what it takes to become the financial advisor of the most sought-after clients: the affluent. I appreciated the upfront attitude of the book as it boldly expresses the need for the financial advisor to develop an investment philosophy and process.

If the advisor has a clear understanding of what he or she believes, the process of successfully delivering that service can follow. The prospective client does not want an advisor still trying figure out what they believe and how to provide financial services. The prospect wants to have confidence in the advisor and the service that follows.

Basic points that must be known by every advisor are summarized. Items such as setting goals, defining risk, obtaining diversification, and finding alternate investments are outlined. As an experienced trust officer who deals with these items almost daily, I found it commendable to see these fundamental items clearly illustrated. It is discouraging to see prospective clients working through their investment concerns because of poor advice from an earlier advisor experience--even though it is a productive source of new business.

 

Gresham’s chapter on setting goals is especially good. Advisors that have a limited inventory of items for sale or that they want to sell should work through these pages. Our clients have many needs, which include the investment of assets for pleasure, gain and/or income.

Consider the wide variety of assets that the affluent may have, want, or may be considering: vacation homes, rental real estate, and business interests are often very high on the lists. These items are quite far from the decision of which fund or ETF to pitch.

The “advisor for life” is aware of the importance of the other assets and helps in the decision making with a focus on costs, tax consequences, and estate planning issues. The financial advisor is in position to be a coach and to advise that perhaps priorities need to be reconsidered or to understand that the client is going to spend some money on assets meant more for enjoyment than growth and income.

 

Ads for state lotteries and the like to the contrary, being affluent does not mean there are no concerns or worries.

The book encourages the advisor for life to be aware of a key statistic:

“88.6% of millionaires feared losing their wealth: not a little bit of their money--a lot or all of it.”

Gresham quoted this statistic from Cultivating the Middle Class Millionaire, by Russ Alan Prince with David Geracioti. And he added, also from the book, that the more wealth held by the individuals in Prince’s study, the more they feared losing it.

Most advisors are not aware of this deep-seated fear. So, the book admonishes the would- be advisor for life to be very aware that “protection of wealth, not growth of wealth, should their number-one priority.”

Indeed, the growth of wealth doesn’t rank as the second-most-important issue, either.

The second biggest concern is reducing the impact of taxes.

Read this book and you’ll soon realize that the size of the disconnect between what advisors think their clients worry about and what actually keeps them up at night will be a primary factor in the financial advisor’s success or failure. The smaller the gap, the better the advisor will do.

 

The latter portion of the book works through the nuts and bolts of an advisor’s business plan for a successful career. Chapters helpful to this effort include: “How to Price Your Unique Value”; “Driving Referrals”; “Selling Yourself“;  and “Taking Care of Number One.” They all focus on the financial advisor’s ability to manage the business that is coming after becoming the “advisor for life.”

These chapters are full of interesting ideas and recommendations. Various hot buttons are outlined such as aged parents, fear of incapacity, divorce, and “What do I do with the Money?” The book suggests some strategies to consider that will bring up many “oh, yeah” moments.

 

This book is somewhat unusual in that it also turns its lens into a mirror. The advisor for life should do some honest consideration of self and the needs and concerns one has. Time for work, study, play, and rest are recommended for long-term success. Each item is defined and examples are given. These are excellent tools that should be stressed in all walks of life.

The book ends with a Practice Analysis as an appendix. There are very detailed questions and ideas to consider. It is long exercise, but worth the time to complete, as it is an excellent way for the reader to obtain a very clear picture of any deficiencies. An example of an investment policy and spreadsheets for client analysis make another helpful appendix.

The book is above all else optimistic. The goal of becoming an advisor of life is presented and the author does not retreat from telling the reader how to attain the objective throughout the book. It is well worth the read.

 

 

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