Years ago, I read an “anti-aging” health book my father-in-law gave me. The theory was that humans, as with all forms of life, have three stages: grow up, reproduce and die. The key is trying to stay in that middle stage (where you are typically the healthiest) for as long as you can. The book focused on keeping you younger via a metabolic and physical plan. While I don’t really recommend the book, some of the principles behind the author’s philosophy about how we have evolved over millions of years and how we treat our bodies makes sense and have stuck with me.
The book suggested that one of the biggest challenges to slowing the aging process was stress. Stress can age you, as well as make you physically weaker and less healthy.
Stress leads to higher adrenalin levels and a “fight or flight” mentality that can affect your behavior (good or bad).
All this came to mind last week when I attended the Financial Planning Association® (FPA®) retreat where Janus Henderson Investors, Investopedia and the FPA® launched a new study called The War on Stress 2019.
The study looked at both clients and their advisors – and it’s pretty interesting. Specifically, 71% of financial advisors are feeling an increase in moderate-to-high levels of negative stress, compared to a year ago. The report suggested that poor time management and ineffective use of technology were among the main roadblocks. However, as I read the report, it was comforting to see that financial advisors with lower stress levels are more likely to have achieved or even exceeded their “personal and professional goals.”
My guess is that both sets of advisors have dealt with extreme market volatility, increasing compliance oversight and evolving consumer preferences. I would argue that those lower-stress advisors probably kept their focus on the things that they could control vs. what they couldn’t.
As the anti-aging book suggested, I can’t control everything in my environment. I wish I could say that heavy traffic, a delayed flight or a technology snafu right before a presentation to a large group doesn’t cause my blood pressure to peak. But I *can* control other elements of stress. For the most part, I have been caffeine free for the last 10 years or so, as it adds stress to the body. I exercise often to keep extra stress (and weight) off my heart and I do my best to focus on what I can control, because that’s what keeps the negative stress down.
What can you control?
The average advisor spends her/his day wearing many hats. On any given day, the independent advisor can be found doing marketing, sales, planning, client service, HR and compliance, among other things. Survey after survey shows advisors spending more of their time on non-client-facing activities. My guess is that most advisors didn’t get into the business to focus on rebalancing a portfolio during a cash event or vetting a new software program to ensure it integrates with their current stack.
I can’t think of a worse example of time management or a better way to increase negative stress.
We can’t control the markets or the economy. We can’t control political announcements of tariffs that can cause the market to make big daily swings, or some large company who adjusts their forward earnings projections downward after a 10-year bull market. We can’t control who is going to win the next election and what that will do to regulations or taxes.
What we *can* control is our time and focus. We can:
- Create a real, actionable business plan and set goals. If you can’t clearly explain your business plan and goals, I would argue that a lack of plan is adding stress (to you and your business). Ask, what is our key deliverable, what do our clients value, how are we going to grow? Do you have a succession plan in place, or at least a continuity plan? What does your business look like in 5 years? 10 years? Just having a plan, something to work for, can lower the stress.
- Define ourselves with a niche. In our Your High-Net-Worth Client Strategy paper, we found that nearly 70% of advisors define their value proposition as a generalist. How do you create consistency, processes and advice to anyone and everyone?
- Find outsource partners. Everything that does not touch the client directly can be on the chopping block – especially if clients don’t perceive it as a value-add in your relationship. Clients value advice and planning; most everything else may be considered a commodity.
- Ensure your clients have a plan. The War on Stress 2019 survey found three quarters of investors with a written financial plan said they feel at least somewhat financially secure, versus 51% of those without a written plan. If your clients have less stress, won’t you, too?
- Look at your stack. The current trend for many advisors is to buy disparate software packages with the hope/promise that they will integrate. Unfortunately, the term “integration” is often misused and misunderstood, and the advisor is stuck in the middle of competing technology issues. We tend to buy technology based on what we think it will do, rather than how it will affect current users (staff and clients), current process and workflows. Take a step back and review your stack – is it good enough, or can you find a truly integrated system for your CRM, planning and platform?
I’m not suggesting that the environment will get any easier or that outside influences will lower advisors’ stress level, but I do think that controlling some of the internal symptoms of stress can only help. Controlling what you can control is a great start.
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