The New Financial Advisor: Strategies for Successful Family Wealth Management

211 Pages·2008·0.94 MB·English

by  G. Scott Budge

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The New Financial Advisor
Strategies for Successful Family
Wealth Management
G. SCOTT BUDGE, PhD
JohnWiley &Sons,Inc.
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FM JWBK223-Budge June30,2008 9:20 PrinterName:YettoCome
The New Financial Advisor
Strategies for Successful Family
Wealth Management
G. SCOTT BUDGE, PhD
JohnWiley &Sons,Inc.
i
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FM JWBK223-Budge June30,2008 9:20 PrinterName:YettoCome
Copyright(cid:1)C 2008byG.ScottBudge.Allrightsreserved.
PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey.
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LibraryofCongressCataloging-in-PublicationData
Budge,G.Scott,1956–
Thenewfinancialadvisor:strategiesforsuccessfulfamilywealthmanagement/
G.ScottBudge.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN978-0-470-27530-6(cloth)
1.Financialplanners. 2.Investmentadvisors. 3.Financialplanningindustry.
I.Title.
HG179.5.B832008
332.024—dc22
2008012001
PrintedintheUnitedStatesofAmerica.
10 9 8 7 6 5 4 3 2 1
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To the memory of my dear daughter, Zoe¨ Claire Lamb-Budge
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Contents
Preface vii
Acknowledgments ix
AbouttheAuthor xi
INTRODUCTION Where We Are and How It Got That Way 1
CHAPTER1 Accepting the Challenge 9
CHAPTER2 The Psychology of Money and Wealth 23
CHAPTER3 Know Yourself 43
CHAPTER4 Service Model Supporting Life Outcomes 53
CHAPTER5 Facilitating Family Meetings 73
CHAPTER6 Major Life Events: How You Can Help Families
Navigate Difficult Times 93
CHAPTER7 Enabling Advisors: Open Letter to a Financial
Institution about What the New Financial Advisor
Needs to Succeed 119
CHAPTER8 Skill Development for Your New Role 131
CHAPTER9 Ethical Considerations for Trusted Advisors 153
APPENDIXA Tools for Engaging and Changing Families 171
APPENDIXB Training and Resources for Advisors 179
Notes 185
Index 189
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Preface
The tide has changed. The roles and responsibilities of financial advisors
opposite their private clients have expanded in depth and importance
in ways that could only be dimly seen even a decade ago. From product
purveyors to solution providers to agents of change, financial advisors find
themselves facing a new competitive demand that they become ever more
sophisticated in the psychology and dynamics of families. This book is
aimed squarely at that challenge, namely, that the new financial advisor is,
like it or not, in the business of changing lives.
This has been true to a degree all along, but it is only recently that
the ability to thoughtfully deliver advice and services in ways that make a
meaningful impact on the lives of clients has become a critical source of
competitive differentiation. Financial service marketing and advertising has
helped generate the expectation that financial advisors will be among the
most trusted advisors in clients’ worlds, and that their job is to facilitate
the attainment of life goals. Knowing the difficulty of differentiating on
performance and product, they have shifted the messages clients hear from
product-centric messaging to everything from how to raise financially fit
kids and run family meetings to how to manage finances through divorce,
retirement,andothermajorlifetransitions.Expectationshavealsoarisenas
both advisors and their clients share in the notion that financial products
have, for the most part, become completely commoditized.
Whathasn’thappenedarethosechangestheadvisoronthestreetneeds
to make in order to step confidently into this new role, a role that is part
therapist and part priest, as well as one requiring the conventional skills of
financialandwealthmanagement.Thisisthenewfinancialadvisor:awealth
managerwherewealthisnowdefinedasthesumtotalofresources—human
as well as financial—that can be brought to bear on a life objective.
Thus,thisworkisabouttakingthedialogueaboutadvisoreffectiveness
to a new level, and about closing the gap between what is increasingly
being promised by the new imagery of the financial advisor and what it
actually means to practice day in and day out as a new financial advisor.
JayHugheshaselegantlyframedtherolechoicesinhisdepictionofthe
difference between what he calls the personned’affaires and the personne
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