Engagement

There are a multitude of factors (both from the prospective client side, and ours) that are considered when making a decision to work together. When speaking with a prospective client, there's probably one thing that I stress above all else. I will not allow for someone's financial well-being to be more important to me, than it is to them. We have a finite amount of time, thus a finite amount of clients that we are able to work with. And we want to reserve seats at the table for clients who are engaged and committed. I'm not able to help anyone who doesn't have a willingness to help themselves.

What does it mean, to be an engaged client? A recent example stood out - working with a client who was navigating a significant career change.

This career change was not at all a part of their latest 'financial plan'. But an opportunity presented itself and conversations were moving forward quickly. Initially, I was a sounding board to let the client simply talk through the dynamics of what a move would look like. Is it a role that will engage them? How will it impact their home life? As we got into the financial side of the discussion, there was significant value creation as far as the negotiation itself went. We were heavily involved in advising on upfront signing bonuses, ongoing stock-based compensation and start dates that would allow for certain unvested stock lots at the existing firm to vest.

The value provided would not have been possible without the client having the awareness to proactively bring us into the process. I didn't have to 'sell them' on having these discussions. 

That's the other lesson of this story - value creation is never linear. It's prudent to remain fully engaged with your advisor to take advantage of these opportunities that will come in different flavors for all of us, from time to time. Just how missing a few of the best days in the stock market can reduce your overall returns, missing the big opportunities for your advisor to add value will probably lead to less optimal outcomes. We were able to add more value in this one instance with our client than we probably had in our previous three years combined of working together. Value creation is usually lumpy, just like portfolio returns.

One of the things I'm constantly think about it is what I can do to help clients become more engaged. Is this coachable? How can I continue to nudge them in that direction? In large part, like any relationship, it's a matter of earning trust over time, and each interaction is a chance to do that. But I'm inclined to say that a lot of this is innate. Most of our most engaged clients have been that way since day 1, before we had any opportunity to do work together and build that trust. If it takes me a half dozen times to connect with a prospective client to arrange an introductory meeting, that's a sign in itself to not move forward. It's not a priority to them.

In the end, I can't care more about moving things forward than a client does.

Like most everything in life, the value someone receives is largely a function of the effort and engagement that they put into it. It's no different here. Be your own biggest advocate and get engaged with your money.

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^{Source: Marketwatch.com - 'Think you can time the stock market? Look at this chart first'}