March 2024
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Simplicity Is Hard To Sell
There are two types of people in the world: simplifiers and complexifiers. You know which one you are. These characters are in a constant battle.
In my opinion, the more complex a fee structure, the worse off the client will be, and the more complex the investment portfolio, the worse it’ll perform.
Weirdly, complex solutions fly off the shelves. Investing illiterates are waiting to be sold complex solutions because that’s what they think investing should be. For the purveyors of such muck, it’s like shooting fish in a barrel or pushing on an open door.
For the simplifiers among us, you’ll know that pitching simple solutions is MUCH harder to sell. Yes, we’re all salespeople. Selling is moving people to act and do things which are good for their future selves. Financial advice is the epitome of this.
To be a successful adviser or to run an enjoyable advice business, you must strip away the unimportant, unlearn the unnecessary, and continue to simplify your approach.
The North Star of the behavioural adviser is two outcomes for a client:
1: To remove their financial anxiety.
2: To promote great financial behaviour.
The rest of what we do is plumping and admin (and there’s a lot of that).
My main investment portfolio has just three funds in it. It could be argued I have two too many. Why not one? Well, I’ve been close to offering the ‘one fund solution’ since I set up Maven Adviser in 2017. However, I’ve decided to pander to clients' emotional needs (North Star point 1). The best portfolio is the one they stick to and sleep well at night being in, with the highest allocation to global equities.
Every client gets a Financial Life Plan, and the bulk of their assets are in vanilla tax wrappers (North Star point 2).
Once I take on a client family, I’m available for unlimited meetings, calls, and emails. Of course, there are busy times and quiet times, but that’s the service.
It’s very rare in 2024 that anyone or any company knows anything about you. We know everything about our clients, and we’re a phone call away. As soon as they contact us, we’re immediately in their world and on hand to assist. Such a service is priceless.
Compliance will continue to compound (it could be argued that Consumer Duty in the UK is the best regulator change we’ve ever seen) and always needs to be considered.
However, the service we offer to clients needs to remain outcome-focused.
📰 Articles & Blogs
Reflection Questions To Help Prospects Find Clarity On Goals [20 minutes]. How to establish meaningful connections with prospects, gain clarity on their goals, and create a shared vision.
JP Morgan's 2024 Guide to Retirement. An invaluable resource for advisers.
The Riddle of Happiness [5 minutes]. Why our pursuit of it may be leading us astray.
The Dumber Side of Smart People [5 minutes]. The hidden dangers of excessive intelligence.
How Generative AI Will Transform Knowledge Work [10 minutes]. How can you leverage its power?
Daniel Kahneman, Nobel laureate who upended economics, dies at 90 [7 minutes]. Another giant lost.
🎧 Podcasts
TRAP 42 - Clients or Customers? [78 minutes]. The TRAP pack discusses the importance of understanding and meeting client needs, and the necessity for financial planning to be an ongoing service.
Should Advisers Market The Real Value Of Financial Planning? [33 minutes]. Is there a missed opportunity for advisers?
📚 Book Recommendations
The Trading Game: A Confession by Gary Stevenson. An outrageous, unvarnished journey to the dark heart of an intoxicating world - from someone who survived the game and then blew it all wide open.
👏 Encore
31 Lessons I’ve Learned About Money [11 minutes]
The Best Way to Get Things Done [10 minutes]
Everything has an opportunity cost [2 minutes]
Identify "Soft Assets" To Turn COIs Into Referral Champions [20 minutes]
Cicero: Why Frugality is The Root of Riches [5 minutes]
