From the September 2006 issue of Wealth Manager Web • Subscribe!


To move beyond a mere buzzword or chic but empty label, "wealth management" demands an in-depth consultative process that delivers affluent clients customized solutions across a broad array of financial needs. The most crucial word here is consultative. Just as the human heart pumps blood through the body to deliver life-sustaining oxygen, the consultative process creates and sustains the personal relationships that enable advisors to maximize their clients' financial lifeblood.

What does the consultative process actually look like? Consider an overwrought bride-to-be, unable to decide on her wedding gown. "If you tell me exactly what you don't want," a canny bridal consultant might say, "then I'll be able to figure out just what you do want." This means that the consultative process is not just using the financial fact-finder of old or asking the same old 10 tired risk-tolerance questions.

"Consultative" means "providing or conveying information." While advisors must provide clients with appropriate and timely information, it is even more important for clients to provide advisors with the information necessary to best serve their financial needs. This happens best within close client-advisor relationships--relationships that are most effectively built via an ongoing consultative process. CEG Worldwide's recommended consultative process consists of five discrete steps, each built around an advisor-client meeting:

1. The Discovery Meeting

2. The Investment Plan Meeting

3. The Mutual Commitment Meeting

4. The 45-Day Follow-up Meeting

5. Regular Progress Meetings

The Discovery Meeting:

The First and Most Important Step

Conducted well, the Discovery Meeting will clearly differentiate you in the minds of your affluent clients. Conventional wisdom holds that a first client meeting should be about selling oneself and one's services, but for the consultative wealth manager, nothing could be farther from the truth. Instead, the first meeting should be all about the client, with a focus on gathering in-depth information in seven key areas:

o valueso goalso relationshipso assetso advisorso the investment processo interests

As part of constructing a Total Client Profile at CEG Worldwide, we coach advisors to use "mind mapping"--a process that engages the client, and enables the advisor to uncover key information in each of the seven core areas. (See the sample high-level mind map at right.) The advisor should speak for less than 15 percent of this first meeting, which should last no more than 90 minutes.

Most clients request a copy of their Total Client Profile mind map and often find that they learn a great deal about themselves (and their spouses) from it. In part, this results from the simple act of collecting and graphically displaying key information, but it is also the result of the types of deep or "second order" questions that advisors are trained to ask. Far too often, advisors accept surface-level answers rather than facilitate clients to reach down and come up with what is really important to them.

For example, if a husband and wife both chime in that "financial security" and "taking care of our family" are what's important to them, you should then ask what, specifically, they mean by this. One spouse's core value may be to take care of the children--making sure they go to the best schools and are financially set--while the other spouse may feel that while it's important to give the kids a good start, it's more important to make sure they never outlive their means.

By continuing to drill down with second order questions, you'll help your clients clarify what's actually most critical for them--information you must have to effectively manage their wealth. Just as important, they will feel seen and heard. Affluent clients invariably report that what they are really looking for in a financial advisor is a long-term trusted relationship. What better way to begin to build such a relationship than through focusing on what's truly important to them?

The Investment Plan Meeting

Presenting Your Customized Plan

Using what you've learned in the Discovery Meeting, you can craft a customized investment plan designed to accomplish everything that's important to your clients. The plan should serve as a detailed roadmap, demonstrating to your clients exactly how they'll move from their current situation to achieve all their goals over time.

While a section including detailed portfolio and asset allocation recommendations should be included, it's important to know that most clients want to spend as little time as possible on the specific details of their investments. So, unless your clients ask, keep the discussion at a relatively high level. Then send your clients home with the investment plan so they can study it in detail and evaluate it at their convenience.

The Mutual Commitment Meeting

Making It Official

Until the Mutual Commitment Meeting, you should not take a check or ask the client to sign any paperwork. Clients consistently report that they feel most advisors care only about their money and assets, and not about them as individuals. By showing a potential client that your consultative process constitutes a mutual discovery process--one where you learn about each other to determine whether their needs and objectives are well-matched with the high-level services and value that you offer--you once again differentiate yourself from other advisors.

At the Mutual Commitment Meeting you'll answer any remaining questions clients have and make sure it's a "go" for everyone. After signing all necessary paperwork, it's finally time to take a check. A nice touch is to give the client a quality binder to store their paperwork and additional related materials as they come in.

45 Day Follow-Up Meeting

Have a pithy Follow-up Meeting about 45 days after the Mutual Commitment Meeting. Re-emphasize the long-term nature of the investment plan, address any buyer's remorse, and collect and work through any necessary paperwork. Essentially, this is a support meeting to reinforce your clients' objectives, answer any questions, and continue to deepen your mutual relationship.

Regular Progress Meetings

Based on your clients' needs and preferences, conduct in-person Regular Progress Meetings two to four times a year. Here you will update them on the performance of their portfolio in the context of their overall investment plan roadmap. Inevitably, there will be some setbacks--quarters with negative results--so you must reinforce the fact that your clients are still on course to meet their long-term goals. These ongoing follow-up meetings also enable you to uncover and assess potentially significant changes--births, deaths, inheritances, job changes--and discuss portfolio rebalancing accordingly. Finally, these meetings give you a chance to bring your network of other professional experts into play to address your clients' total wealth management needs--such as estate planning, tax planning and charitable giving.

Industry studies show that affluent clients remain largely dissatisfied with their financial advisors. Why? They had not yet found the long-term trusted relationship that they were looking for. By implementing the consultative wealth management process, you will put yourself ahead on the road to becoming that trusted advisor.

Patricia J. Abram is a senior managing principal with CEG Worldwide (, an industry research, training and consulting firm.

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