Are you a financial services supplier or an architect? Your clients may be viewing you as one or the other. When it comes to building homes (or financial plans) the raw material supplier and the architect both play a significant role in the construction of a home. Neither is necessarily bad or good, better or worse. They have very different roles to play, and they have very different perspectives.
For Clients Who Know What they Want
The supplier desires to fulfill a client's order. A client's financial house will need lumber, nails, windows, concrete, sheet rock, wiring, plumbing, lighting, and so on. The supplier may carry a wide range of products in each category and each may be suitably used in the plan. The cost and quality may vary from product to product, as well as the price markup to be earned by the supplier. The supplier fills the order and is compensated to do so. The more building materials the client buys at the greatest markup, the more the supplier earns.
Building a Plan
The architect desires to draft a plan to build a client's financial house. She is focused on understanding the client's goals. She pays attention to the concerns clients may have about the project, like cost and features. The architect’s mission is to draw a blueprint that satisfies the client's needs, and gets the most of what the client wants within the resources they have. She provides specifics instructions to be used by the client to purchase materials from the financial supplier. When fashioned together correctly, the client ends up with a financial house on time and on budget. The architect is not concerned with the price of resources, or the revenue that the supplier stands to earn. Her focus is on drafting a plan that realizes the client's ideal situation within the confines of available financial options and the client's budgeted resources.
If a client visits the supplier without specific instructions on which materials to purchase, and in what quantity, it could be a disaster. The supplier may sell too much of one thing, and not enough of another. Whether done for self-gain, or out of ignorance, it is an expensive and wasteful way to go about building a client's financial house. However, if a client visits the same supplier with a detailed blueprint and list of building materials, it will be a prudent, efficient, and practical approach to building their financial house.
Which are you?
Ask yourself, would I rather work as a financial architect or a supplier? The answer will be important to your clients and prospects.
If you're interested in being a sales person and selling products, you're likely a supplier. You sell financial products that are suitable based on the information your clients share with you. In return for your service you receive a commission on products your clients buy. Although you may be under no legal obligation to act in their best interest, your recommendations must be suitable for their needs. You have access to various products of varying quality and price. You are happy to sell your clients as much as they want to buy.
If you're a financial architect, you probably provide guidance as a comprehensive planner operating as a fiduciary. You utilize computer aided design programs to calculate and project likely outcomes. As a fiduciary, you are required to act in your client's best interest. You take careful inventory of all of your client's goals, and listen to their concerns. You strive to build a comprehensive plan using the retirement resources that your clients have to work with. You account for the impact of various rates of return. You also consider the impact of inflation, and of taxes. With the aide of your computer design programs you may stress test the plan under various conditions.
What Do Your Clients Want?
If your ideal clients have a plan and are ready to purchase specific products, it may be best for you to act as a financial supplier. However, if your ideal clients are searching for a thorough analysis of their resources and goals, recommendations for financial products to be used in a complete plan, and how to put it all together, your goal should be to act as a financial architect.
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