Working with your clients' other advisors to create a cohesive, highly functional team to offer proactive and holistic advice is how things are supposed to work. But in reality, most clients don't have teams. they have a collection of subject matter experts who are called upon when needed, frequently operating within their area of expertise and rarely collaborating on a proactive basis.
Like all good teams, a client's financial team needs a great leader. The team needs someone to act as head coach -- someone who will take accountability for the direction of the team and the results achieved by each subject matter expert on the team. Most desirable clients already have a lot of advisors. They have an accountant, a broker, a 401(k), an old 401(k), a banker, an investment advisor, an insurance agent, a life agent, an estate planning lawyer, a business lawyer, and so on. In fact, it is entirely possible that your "A" clients have as many as 20 allied professionals who may be called upon to serve in any given situation.
And under this scenario, the client is forced to listen and take advice from any of these 20 different professionals at any point in time.
We've also witnessed disparities among the various team members regarding the advice rendered to a client: The accountant says this, the lawyer says that, and the insurance agent has yet another perspective, now fully confusing the client. In this case, your client is acting as their own head coach.
Most clients are not capable of serving as their own head coach. The head coach needs to be knowledgeable about all of the subject matters that the team may need to consider as they strive to reach all of the client's life goals and objectives. The client should be occupying the owner's suite, watching the game from the top and charting the direction and objectives of the team. In financial terms, as the team owner, your client would be laser-focused on their life goals, and live each day with purpose toward achieving their vision for an ideal future. Once comfortably situated in the owner's box, the client will now ask the team members to report to the head coach, who will work to see that everyone acts in concert, with every financial move made in sync with the client's personal goals and objectives in focus.
WHO'S IN CHARGE HERE?
Now that we've figured out that your client shouldn't be the head coach, we need to decide who should be the head coach. As a financial head coach, the role is to make sure that the team operates as a team, and not a group of narcissistic subject matter experts competing for the attention of the client.
This may reduce conflict in that the head coach should evaluate the advice offered by each expert and help the team owner (the client) make decisions that are in their best interests based on a deep understanding of the personal situation and their most important dreams and goals.
From my perspective, the financial planner is best suited to be the head coach. With training and education that is interdisciplinary in nature, the planner is in a good place to understand the subject matter experts, and to be able to help integrate with the other moving parts of the financial plan. If you are a CPA who truly practices holistic and proactive financial planning, you are in an even better position to serve as the personal financial head coach.
Don't fake it here. You are either a real, holistic planner or you are not. Clients deserve more than lip service about financial planning. The advisor who preaches planning but stops acting proactively and holistically after they get the assets to manage or sell their product is doing a disservice to the client and the profession.
How do you actually become the head coach? You've heard the saying that you get what you ask for, haven't you? The same applies here. Let your clients know that you are capable and eager to serve in that role.
Then you need to actually deliver on what you preached. For many CPA firms, this may mean beefing up your current offerings. You may need to upgrade your systems, staff and expectations regarding engagement fulfillment. This may even require serious infrastructure changes with your RIA or affiliation partner. As you know, some firms are better equipped than others to help you deliver on the value promise to clients as an effective head coach.
This head coaching engagement starts as you would start any other engagement. There would be an engagement letter and a fee agreement. Head coaching is more than a cursory planning review of other related areas -- it is an in-depth examination of everything in your client's financial life. The head coach should be prepared to analyze everything from cash flow to ownership of assets and integrate that with their forms of risk management for property, liability, earnings and life. The plan must also coordinate with their investment plan, their desire to mitigate the adverse consequences of taxation, a plan for retirement, an estate plan, a business continuity plan and whatever else is significant and important in your client's personal and financial life.
During the course of this examination, it is likely that you will encounter areas that require more in-depth analysis and knowledge than your team's current capabilities will allow. This is where you would get your first interaction with the client's other advisors. This may be good or not so good. Make it clear to your clients that as the head coach, you will be making assessments of the capabilities and fulfillment skills of these other advisors. This gets tough if your client had a long-term relationship with some other professional who isn't carrying their weight or hasn't delivered services or products that are always in the best interests of the client. And just like a professional sports team would not tolerate a deficient assistant coaching staff, neither should you.
When you do run into incompetence at the assistant coaching level, it is your fiduciary obligation to point out the deficiencies and offer a solution. The solution may be an introduction to a capable professional or you fixing the problem. But beware the latter, as it may put constant pressure on your resources and alter your ability to effectively serve as head coach. In some cases, it may be prudent to walk away from an engagement if your client refuses to upgrade an inadequate assistant coaching staff of subject matter experts.
A good subject matter expert assistant coach will offer thoughtful analysis of their area, and be open to new ideas and willing to evaluate the consequences of other recommendations on their particular area of expertise. We frequently ask for such analysis and advice in writing to document the due diligence process and create stronger support for the basis of the overall recommendations.
BUILD YOUR OWN TEAM
Make sure that you have met and interacted with all of the other professionals in your client's financial life. This is a significant part of the process when delivering on your fiduciary promise as a head coach and should shed greater light and expertise on the areas in need of review. It may also be a way to add to your extended bench of like-minded, high-quality professionals with whom you may build a relationship that grows beyond any one client. In a defensive way, it will also help to identify the other advisors who may be looking to undermine your role or bring in their own buddy as the planner/head coach. To mitigate this, it would be ideal if your client is willing to introduce you to these other advisors as the personal financial head coach. When the client notifies the other advisors that you were chosen by them to lead the team of professionals to guide the family on their financial journey of living their vision for an ideal life - it has force and effect.
This first part of acting as head coach, where you are meeting the other advisors and analyzing everything, could take up to six months. Don't be shy about billing - this is one of the few services that clients haven't experienced before and one that frequently adds value.
You may not need to see all of the other advisors regularly, but it is important to build rapport and have enough of a relationship to support each other as needed. I like to speak with or see the other advisors on an annual basis, and document the meeting or discussion to benefit from the wisdom of the team.
You will also need the client's written permission to share any confidential information about them in order to get timely and relevant support from your team members. Each team member should also have written agreements with the client for confidentiality and non-disclosure of information beyond their staff or other team members.
As with any engagement, the head coaching engagement also needs to be in writing, with clear and understandable recommendations. Your annual meetings should track progress on goals and objectives with clear recommendations for changing course or different objectives.
For decades, planners have sold their services in a manner very consistent with the discussion that we've had in this article. My vision for our profession is that all planners will live up to the fiduciary standard as their clients' personal financial head coach.
The good news is that your clients now understand that they need something more than the old-school planner who gives lip service to holistic and proactive wealth management. And if you do a great job as head coach, and integrate the services of your clients' other advisors, these other professions will also see the benefits of head coaching services, and that would be really good for our profession.
John P. Napolitano, CFP, CPA, PFS, MST, is CEO of U.S. Wealth Management in Braintree, Mass. Reach him at (781) 849-9200.
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