The following is an edited excerpt from the new book, Wealth, Actually, by Frazer Rice.
The wealth management industry has a lot of useful tools and many smart, sound, well-meaning people to advise clients. The way for clients to access the best parts of the industry — parts that can be maligned, both fairly and unfairly — is to be a better client.
One of the ways to be a better client is to have a broader and deeper understanding of the “problem” you now face: what to do with your wealth.
As a client, putting forethought into your goals and gathering advice from different data points will help you make better decisions. It will help you use the industry more effectively for your own purposes and avoid being used by the industry for its purposes.
The concepts that led to success in a wealthy family’s area of expertise may not translate into success in the broader management of their investments. Clients should have a good group of advisors who frequently ask the question, “What do you want your wealth to do for you?”
That question should be asked repeatedly. The answers should be reviewed and challenged consistently.
Listen, Diagnose, Fix…Anticipate
All of the questioning and advising in the world will not help any client if there isn’t structure attached to the exercise. Without structure and forethought, it’s easy to veer off course and have important wealth discussions devolve into emotional arguments or veer into wasteful intellectual debates.
I try to head this issue off at the pass by introducing a simple framework to the problem-solving process.
This is the philosophy of “listen, diagnose, fix,” borrowed from Bill Frist, a former Senate majority leader. He was also a heart surgeon, and his family runs the big healthcare conglomerate HCA. He has been successful in three distinct professions, and I attribute part of his success to the simple framework that he applies to the problems he faces.
It’s an idea and approach that may not be complicated, but may not be easy to enact, either.
Those three little words — listen, diagnose, fix — provide the framework that my clients and their advisors can all refer to as we assess, plan for, and solve the clients’ issues.
The framework reminds advisors to:
Listen to the client and hear their issues,
Diagnose the problem(s) and how they relate to the client’s concerns,
Fix the situation and lay the groundwork for dealing with future issues.
The idea is that we as advisors should work hard to listen to the client and their issues, diagnose their needs and wants, and then fix any problems.
This framework removes (or at least contextualizes) emotion from the problem-solving process. It reminds the group of what is important as we deal with complicated issues. Finally, those three words drive the group (both clients and advisors) to a solution.
The Importance of Anticipation
For my current clients, I stay involved and focus on anticipating issues before they happen. If there’s one element to add to the “listen, diagnose, fix” philosophy, it would be “anticipate.”
Anticipation is important. Even after you’ve “fixed” the initial problems, you’re never done advising a client.
Anticipating issues is what takes an advisor’s value to the next level. When I anticipate issues for my clients, I take the best information I have, look at where the world is going, and make sure each client’s wealth and personal situation remain in alignment. Even in uncertain times, this maximizes the fulfillment of their goals.
Anticipation is one of the most valuable aspects of having a seasoned wealth management advisor. Clients themselves can’t expect to be experts in all aspects of wealth management.
It’s good to have an advisor and a team of experts who are keeping their eye out for you. Ideally, that advisor has a broad palette of skills, resources, contacts, and experience to work from.
A broader sensitivity allows advisors to see beyond one cycle and have a longer term, multiyear, and multigenerational approach to a client’s wealth and the issues that may be faced in the future. It makes the coordination and delivery of advice a simpler exercise.
For more guidance on how to intelligently manage your wealth, pick up a copy of Wealth, Actually, by Frazer Rice.