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4 mistakes I made as a financial advisor

A long time ago (in a galaxy far, far away) I was a financial advisor. 

I’m proud of many things that I achieved - but with the benefit of hindsight, I realize that there are some things I could have done differently. 

I’ll share with you now the biggest mistakes I made as a financial advisor and how to avoid them. My hope is that this will serve as valuable advice for those in the advisory role and also as a guide for those who are seeking financial advice.

MISTAKE #1: Acting as “analyst” not “advisor” 

When I started as an advisor, I wore too many hats. Instead of focusing on my strengths, I tried it all - and ultimately, did nothing well. What I came to realize is the following; serving clients is a full-time job, but so is building portfolios. 

I see this dynamic frequently while meeting with wealth management firms as part of my current role on the AdvisorEngine® Business Development team - many of the advisors I talk with are stretched too thin.  

The solution - there are millions of dollars being spent by very smart people and firms to evaluate and create models for all types of portfolios. All this is being done for a very affordable cost. Serve your clients and stop trying to be an analyst.

MISTAKE #2: Failing to network, network, network

For many years, I underestimated the benefit of building a broad professional network. In my world, it was me and my clients. Networking with others in the industry, building relationships beyond my clients was not a priority. 

It took a jarring moment when I lost an important client to another advisor because they received a referral from one of their other trusted professionals for me to pick my head out of the sand and realize the power of networking.

If I had it to do over again, I would build relationships with estate attorneys, accountants and others within the industry. It is important to surround yourself with people who have different skillsets - to network.

MISTAKE #3: Being myopic in my approach

When I was an advisor, I lacked the ability to see the entire scope of things affecting my clients and my business. 

Nowadays, I read about the impending wealth transfer underway in our country. This is a real opportunity - a real issue, facing real people. 

I am afraid if this transfer of wealth happened during my time, I would have missed the boat entirely. Don’t fall victim to the same tunnel vision - expand your approach to capture the opportunities that comes with this wealth transfer.

Think broad and consider the answer to these questions:  

  • Are you thinking holistically? 
  • Do you know your clients’ children and grandchildren?
  • Do you know your clients’ CPA, estate planning attorney and other professionals? 
  • Do you understand which charities and organizations are near and dear to them? 
  • Do you know their biggest fears?  
  • Do they know that you are their family’s CFO?  

If you can’t answer these questions, your business is at risk. 

MISTAKE #4: Not thinking long term

I spent quite a bit of time back then focused on the here and now. I did not engage in enough forward-thinking discussions with my clients. My conversations were more focused on the numbers and not on the important long-term goals and objectives of clients. 

I hardly considered what they really wanted their money to do for them in the future. These types of discussions would have been clarifying; not only for how we should invest the money, thinking more holistically about what was most important to them.

My short-term thinking also affected the technology I used to run my business. I was not cutting edge, I was old school - pen, paper, spreadsheets - those were my go-to's. 

Are you carefully considering the long-term needs of your clients? Have you considered how technology can make your processes better, more efficient

It’s time you developed a digitally executed game plan that puts your clients on track to achieve their financial goals for both now and down the road. 

Key takeaways

I work with hundreds of advisors annually and I see it every day - advisors acting as portfolio managers, reluctant to expand their network, unable to delegate and constantly spinning their wheels - getting nowhere. 

I ask advisors if they are embracing models across their business, incorporating accountants and attorneys into the discussions and not everyone is doing so. 

I ask advisors how are they connecting with the next generation of investors. The ones that might not have the AUM now, but will down the road – the answer to that question typically is not a clear one. 

I ask advisors if they are utilizing technology and this digital age in a way that can help scale and grow their firms. Advisors must establish their relevance by remaining contemporary. 

From the age of 15, I wanted to be an advisor. Now I help them through technology and the brilliant people at AdvisorEngine. From this perspective, I am able to see clearly what steps I could have taken - mistakes I could have avoided that would have made me a better advisor. 

Now, as we head into 2020, I hope this retrospective will help you - help you to meaningfully serve your clients, maintain your business and be a better advisor altogether. Learn from my mistakes.  

I’ll leave you with this - it’s interesting to think about how technology will continue to change the landscape of wealth management; allowing advisors to deliver more efficient and effective financial advice. I recently had the opportunity to sit down with FAMagazine’s FintekNews to answer a few questions about the FinTech industry, you can read the article here: 3 Questions With David Coyle Of AdvisorEngine.

This blog is sponsored by AdvisorEngine Inc. and CRM Software LLC. (“AdvisorEngine”) The information, data and opinions in this commentary are as of the publication date, unless otherwise noted, and subject to change. This material is provided for informational purposes only and should not be considered a recommendation to use AdvisorEngine or deemed to be a specific offer to sell or provide, or a specific invitation to apply for, any financial product, instrument or service that may be mentioned. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Opinions and forecasts discussed are those of the author, do not necessarily reflect the views of AdvisorEngine and are subject to change without notice. AdvisorEngine makes no representations as to the accuracy, completeness and validity of any statements made and will not be liable for any errors, omissions or representations. As a technology company, AdvisorEngine provides access to award-winning tools and will be compensated for providing such access. AdvisorEngine does not provide broker-dealer, custodian, investment advice or related investment services.  AdvisorEngine and Junxure are registered trademarks of AdvisorEngine Inc.

David Coyle

David Coyle

David Coyle is Senior Vice President and Head of Business Development at AdvisorEngine. He is responsible for all aspects of business development including client relationships and partnership opportunities. David has a unique blend of technology and business knowledge gained from more than 20 years of experience in the financial and wealth management industry. Prior to joining AdvisorEngine, David worked as part of the wealth management team for Interactive Data Corporation—helping financial services and wealth management firms to provide market data, mobile tools and web tools to customers and financial professionals. David also served in business development and sales roles with BlackBerry, Outercurve Technologies and Northstar System, though he began his career as a private client advisor with Merrill Lynch. David holds a Bachelor of Science in Marketing from Messiah College.


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