One of the most significant problems financial advisors face is that the public does not know what they actually do. A person gets handed a business card from an advisor affiliated with a broker-dealer and assumes the advisor sells investments. A person receives a phone call from an advisor affiliated with an insurance agency and believes it precedes an insurance sale. But often, these frames and perceptions are outdated or inaccurate.

The current perceptual frame of the vast majority of the public is that most financial advisors are simply salespeople or that they only handle financial transactions. The thinking tends to be that the type of product, sale, or other financial transaction is limited to the business that the parent organization has historically done. The public doesn’t realize that the wirehouse advisor might offer financial planning, providing a goals-based approach to designing a wealth strategy, or that the agent affiliated with an insurance company offers other services beyond insurance that include a financial planning approach. They don’t distinguish between wealth management and investment management, or know that their current advisor can probably do far more for them than he or she is already doing. To be frank, when it comes to understanding what advisors do, the public is fairly uninformed.

The blame for this lack of understanding lies squarely with those of us in the financial services profession. Is it realistic to expect the public to have followed the evolution of our industry from a selling profession to an advising profession to a partnering profession? Is the public responsible for understanding the practical ramifications of new federal regulations and legislation on the way we do business, what we call ourselves, and how we are able to serve them? The answer to both questions is a clear no. In an industry as technical, complex, and ever-changing as financial services, it is up to advisors and financial services organizations to educate the public and clients on the function and value of wealth management advisors.

This reality gets at the heart of the challenge for advisors today: They are framed all the time by the very people they want to serve. More often than not, the client or potential client’s frame is a mis-frame that leads to lost opportunity and lost business because clients are turned off by salespeople, they don’t realize the full value they can attain by working with advisors, or both.

The best in the business have discovered that the sales frame is an important area to reframe. They’ve moved from the old frame of “I sell to my clients” to the new frame of “I partner with my clients.” This chapter will explore that reframe in depth.

The Mis-Frame

Yes, it is true: Advisors have been framed as part of one of the least trusted groups in America—salespeople. It’s not my intent to give financial advisors or salespeople a bad rap. However, all we have to do is think of the unlikable Willy Loman character in Arthur Miller’s play Death of a Salesman, or the stereotype of the aggressive, self-serving used-car salesman to be reminded of the negative images that get associated with sales.

Because the public tends to think of the work of financial advisors as revolving around selling investments, life insurance, financial plans, and so on, every negative image associated with sales is, on a regular basis, automatically assigned to the advisor: pushy, self-interested, inauthentic, untrustworthy, obnoxious—you name it. As a result and without even opening one’s mouth, the advisor who hangs a business shingle, affiliates with a brokerage firm, or hands out a business card has been framed.

What’s more, when the financial services industry takes a misstep that shows up in the news headlines, the “greedy salesperson” frame is merely reinforced. Also reinforced is the idea that the industry (and therefore most financial advisors) is only interested in how much money can be made off of people.

In addition to the potential negative connotation of selling, the selling approach no longer accurately captures what advisors do. Today, wealth management advisors are doing financial planning, estate planning, tax minimization, and many other wealth-related activities, but the public often assumes that these individuals are simply selling investments because that is what many in the industry used to do. It’s unfortunate because advisors lose an opportunity to provide more to their clients, and clients miss out on an opportunity to be served more comprehensively.

The Roots of the Industry

The public has come by the negative salesperson frame honestly. In the early days of the profession (around the 1920s), the advisor was called “the customer’s man” or the “customer’s broker.” The job of the customer’s man was to place and take orders and to buy bonds and stocks. The customer’s man sold investments to clients. Along the same lines, an insurance agent in this time period was called a “special agent.” What a special agent did was sell life insurance products to customers.

Over time, the customer’s man became “the stockbroker.” The stockbroker also took orders from the client, managed the account, and bought and sold securities. As time went on, this financial professional became known as “the account executive.” Whether the advisor was a customer’s broker, a stockbroker, or an account executive, he or she was still an agent in the business of sales. The advisor in these times made money by buying and selling stocks, bonds, insurance, and other financial instruments to clients and by earning a commission or fee on the sale itself. The incentive was for the agent to buy and sell, all while making money for his or her client to retain the right to keep trading the client’s account. The idea of financial planning as a whole or comprehensive wealth management had not yet come into play for the industry.

At the time, there was also a series of “county roads.” If you got started in the business by joining an insurance firm, you sold life insurance. If you got started in a “boiler room” selling stocks and bonds, you were a broker. If you got started with the old IDS (Investors Diversified Services, Inc.), for example, you sold financial plans. Each of these individual firms primarily sold one product. Each product was its own individual county road.

The Glass-Steagall Act of 1933 changed things forever when it allowed a merger of professions, so that bankers could sell investment products, investment professionals could sell life insurance, and life insurance people could do financial planning. Suddenly, the service roads of the industry merged together onto a superhighway. Insurance agents began selling investment plans, investment managers began selling banking products, and bankers were all of a sudden selling investment products. Even the independent planners who might have been investment managers were helping clients minimize taxes by working with their clients’ estate planners and writing insurance policies. The individual-product sale was over. The role of the wealth advisor was born.

After World War II, financial planning was born to meet the growing needs of Americans.¹ Suddenly, financial professionals were doing more than selling: They were helping clients create a financial roadmap for the future.

During the next few decades, the work of financial professionals continued to gain credibility as the industry organized to provide technical training and designations. Suddenly, multiple designations appeared in the industry. Members of the profession obtained CFPs, CHFCs, and CLUs; they earned CIMA Chartered Professional Wealth Advisor certifications. All of these designations helped to build some level of efficacy for an industry that was starving for a clearer identity and for credibility. The industry was also slowly but surely moving away from sales.

A further critical development occurred in 1969 when 13 individuals met in Chicago (predecessors to the Certified Financial Planner Board of Standards) and developed the notion that the public could gain value from a “profession that integrated knowledge and practices from the many, often-fragmented areas of the financial services industry.”² The role of the advisor as a supportive expert who helped the client understand varying pieces of the financial industry—beyond investments—emerged. The move toward wealth management was underway, albeit without the name yet.

The trajectory of evolution faced by professionals in the industry is captured in Figure 3.1.

Sales, No More

There was a time when the financial professional as salesperson was enough. In fact, as late as the 1980s, the stockbroker was a symbol of American success. The baby boomers working with them wanted the best of everything, including the best advice about which stocks to choose for their portfolios. Stockbrokers were held in high regard by the boomers, who were outearning their parents and transforming the economy in the process.

Then, during the 1990s, the boomers discovered the Internet, and many started doing their own trades online. What’s more, after 30 years of brute-force traditional sales marketing from advisors, consisting of millions of cold calls a day, the public had become burned out on the sales approach that financial people had often provided to them. In addition, the public was smart enough to recognize that they could save the broker’s commission by buying and selling on their own.

Suddenly, brokers-as-salespeople were needed less and less, and so these professionals transformed themselves into financial advisors, offering a more consultative and needs-based approach. However, many newly minted “advisors” were still essentially operating as salespeople, identifying their clients’ needs to position products for sale. They were trying to do the same work disguised under a new name, even though the demands of the marketplace had changed. The sales approach was often endemic to the whole organization, a sign of the organizational strategy at large and an indicator of the culture of the industry.

Being a broker or a consultative seller is no longer enough. Today, the boomers are approaching retirement in large numbers and are leading increasingly complex lives. They need someone who can help them achieve not only their financial goals but also their life goals. They expect better service with lower fees. They’ve been through the ups and downs of the market and are skeptical of sales pitches. In response to the boomers’ higher expectations, a new type of investment professional is being born.

The need for a new kind of advisor is not just due to boomers, though. Today’s clientele—boomers, Gen Xers, and millennials alike—is sophisticated and different. In a flattening world where vertical hierarchies are transforming into horizontal relationships, the client expects to be brought into the planning process, not to be told to simply trust and accept the advisor’s stock picks and financial recommendations. What’s more, clients want to work with a financial professional who knows how to match goals with planning and investing.

In the old days, when investing was still out of reach and clouded in mystery for the mainstream person, clients needed their brokers and advisors to guide them on investments and to effect transactions for them. I can still remember giving a seminar in the late 1990s in Wichita, Kansas, regarding a privatization fund my firm was selling. Heavy snow was falling as I pulled into the parking lot and I remember thinking that no one would show up in such bad weather. Instead, 250 people made up my audience, and I developed laryngitis because I had to talk loudly enough for everyone to hear me. Similar bad weather at a seminar in Oklahoma City did not deter folks from attending that time, either. Neither did other such circumstances all over the country. People were coming to these seminars because they had to come; it was the only way to get information at the time.

Today, people don’t have to come to these presentations or seek out advisors to get information on investing: They can get it on the Internet. There they can research, buy, and sell investments, managing their own portfolios with ease.

For the youngest generations, who are tech-savvy digital natives, online money management comes naturally. When one of my sons was in high school, for example, he surprised me one day by letting me know he had started managing his own investment portfolio online. While we had had some conversations along the way to set the stage for his interest in finances, the initiative was all his own and he had no trouble getting set up online. The world is different now. The reality is that 20, 30, 40, and 50 years ago, financial advisors were needed to effect transactions, make trades, and sell stuff; today, those services are no longer necessary.

Welcome to the World of Wealth Advising

With the “death of the salesman” in financial services, we are seeing the “birth of the wealth advisor.” Christopher P. Jordan, founder and CEO of LEXCO Wealth Management, has seen this transformation take place in his own career.

Prior to founding LEXCO, Jordan worked as a partner in an advisory firm that placed a heavy emphasis on sales quotas and selling loaded mutual funds and other commission-based products. Interested in taking a more holistic approach to wealth management, he started his own firm that focused on service rather than sales. “With high-net-worth clients, you’ve got to offer something more than just a product,” says Jordan. By taking a comprehensive approach to meeting his clients’ needs, Jordan has created a highly successful practice. LEXCO Wealth Management has been ranked the number seven branch in the nation with National Planning Corporation,³ and Jordan’s now 17-person firm has been ranked “three years running as one of the top 10 offices in the nation at his Broker/Dealer.”⁴

For Jordan, being a wealth advisor means bringing together a team of people to help his clients achieve their goals. He communicates regularly with a broad network of estate planners, insurance specialists, CPAs, attorneys, mortgage experts, and other professionals who can help his clients create an integrated financial plan. “In today’s marketplace, you’ve got be different,” says Jordan. “Our team-based approach is one way in which we differentiate our firm while helping our clients simplify their financial lives.”⁵

Because Jordan makes it easier for his clients to reach their goals, his clients see him as a trusted advisor rather than simply a salesman. He has shifted from the old frame of “I provide my clients with one particular financial service” to “I provide my clients with comprehensive wealth management that begins with outcomes-based financial planning.”

Having started LEXCO in 1999, Jordan has been an early leader in the movement to evolve the financial services industry away from sales and into holistic wealth management. Unlike some professionals in the industry who have caught on to the title change from financial advisor to wealth management advisor without actually deepening their practices, Jordan has built a firm that can deliver on its promise to help clients manage the full breadth of their wealth.

Conclusion

It is time for the death of the salesman and the rise of the wealth advisor. It is time for advisors to move away from a transactional sales approach, and even the consulting approach, and toward forming deeper relationships with clients. It is time for advisors to serve clients by stepping into the lead role of coordinating the many professionals that are needed to deliver true wealth management. It is time, too, to change the way advisors charge for their services while redefining the value they provide. And it is time to develop an intimate understanding of each client’s unique needs as clients move toward a future just their own. While sales will always remain a part of our job as advisors, being wealth advisors means spending less time selling products and more time marketing ourselves as trusted advisors and then delivering on that promise.

Although many advisors have moved along a trajectory from sales to financial advising and now to overall wealth management, many clients are still stuck framing advisors as salespeople. That mind-set affects clients’ willingness to engage with the advisor; it affects their ability to seek the services advisors provide. Finally, it limits clients’ ability to tell others about the advisor’s value. It is up to advisors to educate clients, their other trusted advisors, and the public on the vast new ways that they can support clients. The reward will be more business, more introductions from the other professionals, and, ultimately, more loyal client advocates who are willing to help their advisors find additional clients. The reward will be an industry that is elevated as the public begins to understand the significant service that advisors provide to the community at large.

The lesson for advisors may be just as much about learning to see and frame themselves differently—not as transactional agents, but as partners with the client and as custodians of the client’s whole wealth picture. For some, this very well might reveal the opportunity to add that more human element to the picture through stronger relational work; for others, it might be the opportunity to provide more technical expertise for clients. The end result will be more satisfied clients and more satisfied advisors, too, who are engaged in meaningful work that yields results and has an impact.

As advisors and as an industry, it is time to rise up and give more to our clients. We need to shift from selling to supporting, from telling to discovery, from hierarchy to partnership, and from one piece of the wealth pie to the whole wealth picture. Today, the value proposition for the client is in that partnership. Those advisors who are able to evoke from the client insights and desires about what they want their wealth to do for them will have the competitive advantage.

In this new phase of the profession, managing money, selling life insurance policies, writing financial plans, rebalancing portfolios, minimizing taxes, and providing banking services all become the technical back-end piece of advising. The front-end piece—the piece that is most powerful—is forward-facing partnering and communicating with the client.

The truth is that being a salesperson is not noble. But helping individuals discover, pursue, and achieve their goals is. As clients achieve their goals, they have the ability to pay it forward, and everyone benefits.