I can still remember this event like it was yesterday. It was my first day of law school. I was attending my first class. The professor went to the blackboard and wrote these words: Assume nothing.
That was the best advice I ever received.
It’s advice I hope you will follow as well.
In my dealings with advisors, I’ve found some common, flawed assumptions. Here are two big ones:
You know best
I divide the “you know best” assumption into two categories: Wealth management and “other.”
You may know more about wealth management than your clients, but it’s a mistake to convey the impression you know more than you do.
If you are “evidence-based”, you don’t try to predict the future. That’s good, but you may assume the future will be like the past.
If “past returns aren’t indicative of future performance”, why do you assume long-term risk and return data is predictive? It’s helpful, but it doesn’t eliminate the possibility of a black swan event. Few advisors, in my experience, fully explain the limitations of long-term data.
In the “other” category, it’s a mistake to assume your superior knowledge of all things financial makes you a life coach. There’s no evidence advisors are healthier or happier than the general population.
It’s entirely appropriate to send prospects and clients informative articles about how they can enrich their lives. That’s very different from assuming you know more about these issues than they do.
Your agenda is paramount
You have many meetings with prospects and clients. Before you go into these meetings, you have formulated an agenda of items you believe should be discussed. You think your agenda is the “right” one.
What about the agenda of the other person? If you start a meeting by launching into your agenda, you may never discover what issues are of paramount importance to them.
Your assumption is logical. When advisors contact me to inquire about our services, it would be reasonable for me to assume they’re interested in learning what we do. Based on my research, I don’t make that assumption.
Instead, I ask this question at the beginning of our conversation: Tell me what you’d like to discuss?
Often, I’m surprised by the nature of the inquiry. It’s much different than I would have assumed.
Resource of the week:
I enjoyed this article on why we shouldn’t make assumptions in our personal and professional life.