Perfection vs. reality

You’ve seen the memes. Instagram vs. reality. What we show the world versus what goes on behind closed doors. But it’s not just a social media phenomenon. It happens a lot with financial advice, too.

Think about it: If you’re advising people about money, you want them to think that you’re good at money. It makes sense, and it’s been the prevailing viewpoint for a long time.

But in many ways, that doesn’t reflect reality. Budget well, pay down debt, invest wisely… that may make you a millionaire, but it’s not always feasible in the real world.

And sticking to that “perfect” standard may be one of the reasons the financial industry feels so distant and exclusionary for most Americans.

I like to use parallel examples for things, so consider this: Are you more willing to work Nutritionist A, who never cheats, eats totally clean, never drinks alcohol, and doesn’t understand why you can’t wake up at 6am to go to the gym every day? Or would you rather work with Nutritionist B, who used to be overweight, has the occasional cheat day, and doesn’t shame you for mistakes because she gets it?

I don’t know about you, but I’m picking Nutritionist B every time.

It’s all about connection 

Any financial advisor will tell you their biggest selling point is how much they care about their clients. And you don’t have to do much Googling to uncover that the biggest piece of advice for finding the right advisor is: Are you comfortable talking to that person about money?

Based on that, the key to successfully marketing yourself as an advisor may not be your returns or your perfection. It may be your imperfection — showing potential and current clients that you’re someone they can talk to about money.

Sharing your imperfections may just be a good shortcut to that. Did you struggle to pay down student loan debt? That might be a relief to someone who feels their loans are insurmountable. Have you struggled with discrimination based on your race or gender or both? Sharing that could help you build a connection with people who previously felt excluded from the predominantly white and male world of finance.

Dispelling the perfection myth 

Keep this in mind: Most people struggle with money. You know the statistics. Credit card debt, lack of savings, bad investment ideas … they’re pervasive. 

And yet, many people think they need to be perfect BEFORE seeking financial advice. The need to be perfect isn’t just something advisors impose on themselves, it’s something they impose on their clients.

So I want to take a minute to talk about asset minimums. There are a lot of high-earning individuals who have the potential to make great, high-net-worth clients… if only they could get out of their own way. And they may need an advisor to help with that.

It’s important to remember that targeting someone with bad financial habits doesn’t mean you’re sacrificing your AUM. Think of these clients as growth stocks, and yourself as an activist investor. If you give them good advice, everyone wins.

 But this is the part of the post where I have to enter a disclaimer. If your business is working well for you by portraying a perfect image, whether it’s for yourself, or your clients, keep doing that. Some clients are looking for that perfect advisor with high returns. And in turn, you may be able to keep the bar high for what you ask of your clients.

 But if you’re looking to expand or grow, there’s no better market to tap than the vast majority of Americans who don’t have financial advisors, and the easiest way to do that may be to get to the nut of the matter… that financial advisors are people, too.

Education can help

One of the easiest ways to bridge the gap between perfection and reality is by education.

Let’s go back to the diet and nutrition example. That first nutritionist plays by rules. And those rules can be strict and unforgiving. The second nutritionist plays by education. If you understand why a rule is in place, it becomes less of a burden and more of a guideline.

For most people, “candy can lead to a spike, then crash, in your blood sugar which will make you feel tired and off for the rest of the day” is more effective than “don’t eat candy.” The explanation makes things feel less restrictive.

And that works with financial advice, too. When clients understand their finances, and how things work together, they’re more likely to stick to their plan.

And they’re more likely to stay on track if things get rocky, which they almost always do.