Knowledge You Don't Need
Reading the Wall Street Journal, Investors Daily and whatever you think you need to do to stay current provides no revenue. Today’s news HAS NO BEARING on your ability to give quality advice to clients, advice that should be focused on the long-term. Quality advice is not dependent on the issues in today’s newspaper:
- What Ben Bernanke thinks or says (it will be different in 90 days)
- Who the next president will be (has it ever mattered)?
- The latest proposal in Congress (most never get to a vote anyway)
If you think I’m off-base, consider this. If you could not have read these newspapers or received any information on the above items in the last 5 years, would your clients have been any worse off? No. Because if you are doing right by them, this day to day gossip in the press is useless. (Numerous studies show that lower investment turnover leads to higher returns. So maybe the less news you know the better).
Knowledge is Not Power
There is a notion among some “professionals” that knowledge is power. This is false. Applied knowledge is power. It makes no difference if you know every permutation about how to select IRA distribution strategies. The planner who spends his time communicating what he knows and marketing himself (even if he knows half what you do), has a more lucrative and vibrant practice and is getting more referrals. I think of my colleague Ed Slott. He has turned one topic, IRA Distributions, into a thriving business through marketing and presenting well. So stop getting so smart about your financial subject matter. Learn to apply what you do know rather than gathering more information that stays in your head.
I am not stating that knowledge is unimportant. But the average financial advisor spends way too much time accumulating knowledge that they never monetize. First, convert what you know and the value you deliver into revenue, then gain further insight through education.
The key to having a great financial services practice is to run a great business. A great business is about:
- Identifying your key success factors and tending to them above all else;
- Marketing to the right prospects;
- Implementing systems that your employees can follow without your input;
- Having a business model that generates revenues when you’re on vacation;
- Organizing your time so that it is spent only on your distinctive competence (i.e. do only what you do best).
If you want to read articles or attend conferences that will help you:
- Read articles in the Harvard Business Review about running a business.
- Read Barron’s just once a week if you must read an investment publication.
- Go to a conference where you learn how to market or you learn technical aspects that can help your clients (new services or products that will increase your revenue).
- Read research on investor behavior and optimal sales and marketing approaches.
- Learn to sell like a master
If you want to join groups on Linkedin, don't join the financial advisor or insurance agent groups, join groups on direct sales or professional practice management or others that directly address what helps drive your business profit.
Side note: If you have not already passed the CFP or ChFC exams then you DO need more financial knowledge. These should be the minimum standards before anyone is permitted to give financial advice in my opinion. The above post assumes you already have this basic competency so adding to your store of technical knowledge need not be the focus of your business if you want to grow it.
