IMGCAP(1)]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.
Each frequently operates within their area of expertise and rarely collaborates on a proactive basis or considers the implications of the other related subject matters.
Like all good teams, a client’s financial team needs a great leader. The team needs someone to act as head coach; one who will take accountability for the direction of the team and the results achieved by each subject matter expert on the team. Most of a firm’s best clients already have a lot of advisors. In fact, it is entirely possible your A clients have as many as 20 allied professionals.
And under this scenario, the client is being asked to listen to and take advice from any of these 20 different professionals at any point in time. This approach heightens the possibility that your client hears disparities among the various team members regarding the advice given to a client. By now, your client is fully confused. In this case, your client is acting as their own head coach or wealth manager.
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 the team may need to consider as they strive to address all of the client’s life goals and objectives. The client in this scenario is analogous to the owner of a professional sports team, and should be occupying the owner’s suite, watching the game from the top and charting the direction and objectives of the family. In financial terms, as the team owner, your client would be laser-focused on their life goals, and live each day with purpose toward pursuing their vision for an ideal future. The client will 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.
TAKING THE LEAD
The role of the financial head coach is to make sure the team operates as a team, and not a collection of narcissistic subject matter experts competing for the attention of the client. This head coaching role should 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 inter-disciplinary in nature, the planner is in a good place to understand the subject matter experts, and 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/head coach 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, “You get what you ask for” haven’t you? The same applies here. First you must educate your clients on the role. It is distinctly different than the way that most clients operate their financial lives today. For those with a desire for complete oversight and those with a complex financial situation, this level of service is ideal.
Let your clients know you are capable and eager to serve in that role. The hard part starts when you need to deliver what you preached. For many CPA firms, this may mean beefing up your current offering. 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.
IN WRITING
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 plan to mitigate or manage risk 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, family governance and whatever else is significant and important.
During the course of this examination, it is likely 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 has 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.
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 to the extent that you can. Your fix can come from within the firm for an additional investment of time or by securing another outside professional to serve. But beware — fixing it yourself 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 within their area of expertise and in the context of the client’s goals and objectives, be open to new ideas, and be 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.
Make sure 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 and may also provide a way to add to your extended bench of like-minded, high-quality professionals with whom you 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 their 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 phase 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 most 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. It would be ideal to speak with or see the other advisors on an annual basis, and document the meeting or discussion.
You will also need the client’s written permission to share any confidential information about the client 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 of 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.
My vision for our profession is all financial planners will hold up to the fiduciary standard as their clients’ personal financial head coach. The good news is your clients have access to tremendous amounts of information and can 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 client’s other advisors, these other professions will also see the benefits of head coaching services, and that would be really good for your business and our profession in general.
John P. Napolitano CFP, CPA, is CEO of U.S. Wealth Management in Braintree, Mass. Reach him through JohnPNapolitano on LinkedIn or (781) 884-2390.
