FA Alpha Daily:
Return Driven Strategy
Powered by Valens Research
What’s the first thing that comes to your mind when you encounter the words, “Return Driven?”
Money?
Portfolio performance?
Equity yield?
Assets under management?
Well, being return driven includes all these… and so much more.
In establishing a return driven financial advisory practice, there are some aspects you need to take note of so you’ll implement activities and strategies that will help you achieve your professional goals.
In the book, “Driven,” Return Driven Strategy, is a framework that can help change the way businesses and professionals operate.
The framework helps leaders and professionals better understand, analyze, and implement activities and decisions that produce superior returns for ALL constituents of a firm. It has 11 tenets and 3 foundations, which, if implemented properly, will lead towards ethically maximizing wealth.
Allow us to explain one of Return Driven Strategy’s “Supporting Tenets” in detail: Communicate Holistically.
This tenet is a Supporting Tenet because high performance comes from understanding the integral role of communications in the entire business process.
Let’s apply that in the world of financial advisors.
As a financial advisor, it’s important that you possess “genuine assets” that can help you communicate effectively with your clients, peers, and acquaintances.
These assets are important to take note of because communication is the ultimate bridge between technical expertise and relationship building.
Here are the “genuine assets” that are important to possess:
VERACITY
This is your ability to conform to facts every time you present in front of your audience.
For example, if you’re presenting data and statistics, it’s important to make sure that everything you’re showing and telling your audience is correct. Your data does not necessarily have to be extremely precise, it just has to be correct. 19th century British author Carveth Read expressed this best when he said,
“It’s better to be vaguely right than exactly wrong.”
Even if you mention approximates of the exact number, that is much better than saying the wrong number in a failed attempt to be precise. Make sure this is clear to your audience so they won’t misinterpret anything.
By being truthful in your presentations, you are also establishing credibility in the eyes of your audience.
HUMILITY
Being humble is more convincing than being arrogant as a speaker. This asset is shown whenever you give credit where it is due and attribute concepts, ideas, and topics accordingly.
Humility can also be seen in the way you acknowledge the help of peers or others in making your practice successful.
Aside from that, not pretending to “know it all” is a form of humility. Sure, you may be a financial advisor, but that doesn’t mean you’re pressured to be knowledgeable about all things that fall outside your domain. Just like any other individual, you can have weaknesses on certain topics or fields too.
Being humble enough to admit that you don’t know everything enables you to present your “human side” to your client, enabling them to trust and understand you better.
SIMPLICITY
One of the best talents to have as a financial advisor is the ability to strip away complexity.
If you know what you’re talking about is a bit complex for your client to understand, making your explanations even more complex will only make things worse.
Instead, simplify your discussion―present your data in an easy-to-understand table or chart, remove unnecessary information, avoid using jargon, and make your explanations as simple as possible.
Your expertise and authority isn’t seen through how complex you sound—it’s about how elegantly you can simplify hard-to-digest information for your clients.
COMPASSION
Compassion is the sympathetic consciousness of others’ feelings and emotions.
As a financial advisor, remember that your clients are giving you their time, commitment, and attention.
Compassion is your ability to value their presence and their time by delivering a great presentation. The more you value your clients and their efforts to listen to you, the more you’ll be motivated to make sure your advice is what they need to hear.
ENTHUSIASM
Pitching to prospects and regularly communicating with clients isn’t an easy task.
Yet mastering these core skills is essential for expanding your advisory practice, onboarding clients, and hitting your milestones.
This is where love for what you do comes into play. Clients and prospects have an ability to detect forced enthusiasm via tone and body language.
How you feel towards doing something will be reflected in the way you conduct your practice.
If you’re feeling forced to do a client consultation or discovery call, it will be obvious the moment you interact with your prospect or client, and he or she will notice it in your tone and your body language.
When your prospect or client sees your positive demeanor, you’ll easily appeal to them and convince them to buy into what you’re offering.
—
As you look to scale your advisory business and guide your clients through complex financial situations, make sure to carry and apply these “genuine assets,” as doing so will enable you to establish an enduring reputation of trust, clarity, and authority in a highly competitive field.
Best regards,
Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research
Today’s article only scratches the surface of what we share with our FA Alpha Members. If you want to get an in-depth analysis of market trends, uncover undervalued stocks, and more, become an FA Alpha Member today.