In this exclusive series, we ask top RIAs from around the country to share their biggest challenges and successes from the past few years. You’ll learn how they’re overcoming the unique issues facing our industry today and glean insights that may be helpful in your own practice.
We recently asked Andrew Cialek, CFP®, wealth advisor and Director of Finance and Analysis at Principle Wealth Partners, to share his perspective on how advisors can best position themselves for organic growth and deeper client relationships in an evolving industry.
Technology has made managing money far more streamlined and accessible. Just look at the growth of robo-advisors. But people want advice, not just an auto-rebalancer and an 800 number to call when they need help. Transactional-based business is disappearing, whereas the appetite for comprehensive, relationship-based planning is growing. That will become much more apparent as time progresses.
To stay competitive, advisors and firms will need to adapt to the individual circumstances of clients, rather than expecting clients to fit into a predetermined box. We often hear the term “cookie cutter” tossed around in financial services. Of course, financial planning is structured (reviews, monitoring, etc.), but every cookie (i.e., client) is different.
Advisors will need to demonstrate a close understanding of pain points, problems, and life goals and provide personalized advice to address their client’s desired outcomes. For instance, passive income through real estate became quite the trend over the last few years, with the rise of remote work and the availability of short-term housing rentals. From our perspective, we want to understand why you're doing what you're doing — what’s motivating you to acquire and rent out properties?
For example, I have a client who owns multiple rental properties and is looking to acquire more. When I asked about his reasoning, he said, “Well, I get rent.” But it turns out the cap rate for his rentals is about 3%. There could be other investment vehicles that offer more potential upside than his real estate property. My role as a wealth advisor is to help put those kinds of questions in context for my clients. For example, is the complexity of managing the real estate worth not just the hassle but also the underwhelming cash flow?
Investing is personal and, therefore, emotional. Managing feelings of doubt, uneasiness, or even outright panic requires emotional intelligence and an in-depth understanding of behavioral finance. Essentially, the softer skills that go beyond numbers and charts.
Our approach is two-fold. First and foremost, we’re in constant communication with clients in good times and bad. In an effort to cut out the “noise” from the news and become the partner our clients trust, we regularly share thought leadership and educational materials. We want to help clients understand that we’re on top of everything and can educate them as well.
Second, in client meetings, we lead the conversation with the client’s financial plan. Volatility and negative events are uncontrollable — that’s been true since the origin of markets and will be for the rest of time. By directing a client’s attention to the long-term plan and educating them on the occasional hurdles along the way, we can help them stay on track.
Regular video content has proven to be quite effective. Clients can watch each video, stay informed, ask questions, and share feedback. Meanwhile, advisors avoid repeating the same conversation with 100 clients. For videos, our team prepares a slide deck with a clear cadence, formatting, and talking points. Then we record and distribute the rough draft internally, enabling the team to weigh in before distribution which helps streamline the creation process.
It’s not easy to produce your own content, especially on time-sensitive trends and current events. However, our support staff, process, and systems allow us to publish both video and written content in an expedited manner. We compile an intensive content calendar that covers the entire year. Then we have weekly marketing meetings to discuss the pipeline for the next month — that way, there are minimal surprises.
Plus, thanks to our back-end infrastructure, we can track performance metrics and continually improve the quality of our content. We’re able to optimize the entire process around what clients are interested in.
A large number of advisors are planning to retire or transition away from their firms in the coming years. As these older advisors start to retire, the next generation needs to be ready to take over. Unfortunately, these same retiring advisors are often late to train a successor, which hinders the client transition process.
Organic growth is the backbone of a sustainable business. We aren’t interested in acquiring other firms just for the sake of scaling our staff — that can introduce unwanted complexity, which doesn’t fit with our culture. We’re very slow to hire because we care about cultural fit. We’d prefer to hire someone with less experience and develop them through our internal processes, rather than bring in a mid-career advisor with a sizable book but contrasting ideals or bad habits.
One way to look at this is to “build” your ideal advisor. What are the qualities that they would have if they were excellent at their job? We write these down and evaluate our process. Are we training people to hone these skills? Advisors in our firm also work within smaller teams to provide multiple touchpoints and a greater client experience overall. This allows younger advisors to take on a more active role in the client relationship and strengthen retention over time.
The technical skills are important, yes, but they represent the ground level — anyone can study and receive certifications. The softer skills are more difficult. Being able to hold intelligent, compassionate conversations with clients. Being driven to foster relationships and genuinely care about another individual. These traits are invaluable.
It translates to client referrals and growth, too. Clients see us promoting from within, they see those skills develop first-hand. That leads to trust and reliance. And then it's a very natural transition from the older advisor, theoretically, to a more junior, next-in-line advisor because they’ve eagerly grown alongside the clients.
Our fastest-growing client segment is business owners. As an independent employee-owned firm, we run a business ourselves, so we can relate and empathize with our clients.
We know what it’s like to be in their shoes, so we can ask the right questions to help resolve any dilemmas, pain points, or changes. For instance, say a client is thinking about expanding distribution. We take a Socratic approach to reframe the situation by asking questions like:
Textbook economics would state that if you can make $1 more of profit, it’s worthwhile. But, ultimately, if that dollar of profit introduces a ton of complexity, pain, and heartache, then I’d say, “Forget the dollar.”
We want to understand the motivations behind client decisions and help them view the situation through a different lens. It's an understanding that they're not working a nine-to-five job; their business is top of mind 24/7 — just like our firm is for us. When you work with people like that and create peace of mind, you become a valuable part of their “inner circle.”
For us, that's exactly where we want to be.
Andrew Cialek has worked in the financial services industry for close to a decade, specializing in comprehensive financial planning and investment management. Prior to joining Principle Wealth Partners, Andrew was the Director of Operations at Olio Financial Planning. He also serves as Treasurer on the Board of Directors of The Madison Foundation and sits on the Board of Directors of The Madison Land Conservation Trust. In his spare time, Andrew enjoys being outside with his wife and son, playing rugby, and reading.
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The views expressed in this material are the views of Andrew Cialek and Principle Wealth Partners through the period ended June 30, 2023, and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
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