3 Steps to Improve Your Practice as a Financial Advisor by Taking Your Own Advice

4 min read
August 06, 2014

Many times we don’t take our own financial advice and that has a negative impact on our ability to enroll others in our services. If we aren’t practicing what we preach, why should anyone else care?

In his book Platform, Michael Hyatt suggests that we should create a product (or service) that we would personally use. In my case, that’s easy, because I am a young professional and money is a major part of my life.

In order for my life (and business) to work, I must implement a financial strategy that supports my lifestyle.

Here's how I take my own advice in order to run a better business in 3 steps -- and how, as fellow financial advisors, you can improve your practice in the same way:

Step 1: Set Up a System That Works for You

I initially asked myself this question: What are the top 3 financial activities that I need to implement in my own life to make it work?

I then focused on the areas that would provide me with the structure to run my business and enjoy my life. Once I stopped to think about it, there was no doubt what those areas were:

  1. Cash flow
  2. Goal setting
  3. Investing

If I could master those three things, I knew I would be well on my way to living a more productive and engaging life... exactly what I wanted. And, since my ideal clients are similar to me, there’s a good chance it’s what they wanted, too!

For example, I know that I need to monitor my cash flow on a monthly basis in order to make intelligent purchase decisions for both my personal and business life. Without knowing what I am paying for each month and how much money I have left over (net discretionary income), I have no control over the amount I can save for my short and long term goals.

If I’m clueless about what I need to save for tomorrow, how can I ever make a decision on what I can spend today?

But by identifying these areas and creating a specific process that I could follow, I began to develop a process for me and my clients. It’s no coincidence that the first three steps in my client process focus on cash flow, goal setting, and investing.

Step 2: Actually Use Your System

Once I established this process for myself, I needed to actually implement it into my life. After all, if I don’t like the taste of my own medicine, I better change the flavor.

So, each year I make sure to use my system to manage my personal finances so I could better help use that system to help clients manage theirs.

As I went through the process over and over again, I noticed what worked and what didn’t work. One thing that wasn’t working for me was simply creating a monthly cash flow statement based on an average of my monthly spending. There were too many variables each month, not to mention the random one time travel and conference expenses.

So, I asked myself what would make the most sense. As it turns out, the answer was simple. I needed to start out the year with a projection of each month’s income and expenses. From this spreadsheet, I could see the impact of various levels of income and expenses by month. As such, I had more control over my actions and could make quick decisions along the way.

Then, after each month, I could go back and input the actual numbers. By doing this, I would have a real life depiction of my financial year in December, which would make the next year’s projections that much more accurate.

Following this process was not only providing me clarity with regard to my personal finances, but it was also allowing me to work out the kinks in the process before a client even set foot in the door. I felt more comfortable about my money situation and my client process all at the same time.

Working this way allows me to adapt and tweak various aspects so that my process aligns with real life circumstances. The more I run through this sequence, the more familiar I am with every step, and the more helpful I am when a client has a specific question.

Step 3: Share Your Experiences to Improve Your Practice

Best of all, I can share my personal wins (and losses) with my clients. As I achieve more and more in my personal financial life, I have more confidence that my process actually works... and I am the proof.

Providing clients with real life examples of how my process works for me in various situations enrolls them in what is possible for them.

At the same time, I am sharing details about my personal life, showing vulnerability and authenticity in my client relationships.

These two things have strengthened relationships in my life more than anything else, and it’s no different with my clients. I want all of my clients to know that I am a human being and deal with similar issues.

No one ever said that as a financial planner I have to be perfect, making all the right decisions around my money and knowing what to do at every moment. The Certified Financial Planner code of ethics doesn’t have a line that says, “I must be perfect and make no mistakes with my personal finances.”

In fact, projecting that image can actually throw up a wall between my clients and me. And that just doesn’t work.

I invite you to take a look at the process that you follow with your money. Does it match up to the one you use for clients? Does it allow you to truly understand an empathize with the personal financial issues of the people you're aiming to serve?

This exercise might provide you access to streamlining everything from your personal finances to your client process. Taking your own advice is a great way to improve your practice. Because if you're a raving fan of your process (with the proof to back it up), who wouldn’t want to be your client?


About the Author

Eric Roberge is a Certified Financial Planner™ (CFP®) and founder of Beyond Your Hammock. He works face to face and virtually with professionals in their 20s and 30s, helping them use money as a tool to live a life they love.

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