Over the past couple of decades, the financial advice industry has seen a tremendous shift as the focus has evolved away from being primarily transaction-based and towards forming long-term service-based relationships with clients. Yet, one of the hurdles advicers have faced along the way is figuring out how to demonstrate the seemingly intangible value of financial planning as a service. The good news is that the profession has been blessed with an ever-expanding supply of credentials and software solutions to give advicers the tools and opportunities to expand their expertise and create deliverables to demonstrate their value. However, since advicers tend to be service-oriented and enjoy helping their clients in as many ways as possible, the challenge is that there can be a tendency to always do more for clients. Which begs the question: Is there a point at which advicers might be doing too much where they should stop pressing so hard to expand their service menu and even cut back on some items on their client service calendar?
In our 139th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards explore ways for advicers who may feel like they are doing too much for their clients to identify the service offerings they can eliminate, implement strategies for phasing out superfluous services, and think about how their own personal learning journeys fit with their visions for their business.
One challenge that advicers may face when figuring out what they can remove from their service calendars is that it’s nearly impossible to get all clients to agree that a certain offering is unnecessary. As while most clients would be perfectly happy without certain services, all it takes is for 1 or 2 to say they want to keep them for advicers to feel obliged to continue delivering them, even if eliminating them might create better efficiencies within the practice or help the advicer achieve a better work-life balance.
One workaround advicers can try is to simply stop doing a ‘thing’ (e.g., quarterly performance reports) and see if anyone notices… and if they do, it’s perfectly okay for the intrepid advicer to say it was simply an oversight. Meanwhile, an even more effective (and data-driven 💙) approach would be sending clients a survey asking them to rate the perceived value of all the services they’re receiving. From there, the advicer can jettison the lowest-ranking offering, knowing that the odds of a client moving on in response would be relatively low… and even if they were to leave, then maybe the advicer would get the added benefit of realizing that the client wasn’t a good fit after all!
Meanwhile, for advicers on their own learning journey, it’s important to note that just because they learn something new doesn’t mean they have to bring it into their business. Instead, advicers can (and probably should) stop adding to their business as soon as what they’re charging aligns with the value they’re delivering. And if, along the way, they find something they do want to add, they can always find a lower-value offering for the new thing to replace.
Ultimately, the key point is that, just as clients can experience ‘lifestyle creep’ as their earnings increase, so too can advicers experience ‘service creep’ as their businesses grow… especially since many advicers are hard-wired learners and helpers. The key is understanding that it’s okay for advicers to stop stacking on additional services even as they continue to expand their knowledge and expertise. And if there’s a question around whether or not they’re doing enough, advicers can take stock and observe whether they’re getting referrals and if their attrition rates are higher than normal. In the end, the odds are that they’ll find they are, indeed, enough!
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