Advisors today are all ginned up about risk. Trouble is—they shouldn’t be.
“We assume if we are excited about risk, our clients are. But when you talk to a client about risk, you may as well insert the word radioactivity. As an industry we’re a couple of years behind the investor mindset,” notes Scott West, managing director and co-founder of Invesco Van Kampen Consulting. “Advisors are making a huge mistake when they talk about risk. It’s like they’re all wearing bell bottoms. They’re from a bygone era.”
What do clients want to hear about instead? As West frames it: “Growth, baby.”
This fall, West’s consulting group will release a new research report on the language of risk. Early findings, according to West, suggest it will be a blockbuster. The takeaway: lose “risk” as your go-to conversation opener. Why? Clients want to be talked to in much more balanced terms.
“They want to know how I can maximize my earnings while minimizing my downside potential. That’s the magic formula, in that order,” says West, 52. “Stop leading with risk. Fear-based language can be paralyzing when used with investors. These folks just lost a decade of earnings. They want to know what you can do to help me get my monthly paycheck back.”
West, a self-described “broker of ideas,” has long recognized the power of words. Since he co-founded the Invesco Van Kampen Consulting Group in 1998, West and his colleagues have presented over 25 communications skills programs to more than 240,000 financial professionals worldwide. Even so, there is nothing about the enthusiastic West that appears at all tired.
Industry consultant Mitch Anthony calls West “a Spielberg” of the industry. “Scott will pick up on a germ of an idea that he knows is going to resonate with the masses of advisors. By the time he’s done with it, it’s like it went through a Hollywood studio,” says Anthony, who has collaborated with West on several books. “He’s got great instincts about what will play and what won’t, just like a producer. He has that something in his gut. He’s a big idea guy.”
One of West’s big ideas at the moment: the often overlooked boardroom presentation.
Advisors tend to spend a lot of time building their case to win new business, but when they enter the boardroom, West says, it is as if “they’ve taken the field with no equipment on.”