“If you have to stand in a long line to get it, you are probably in the wrong line!” I heard this said when I lived in Texas in the late 1980s. I don’t remember who said it but it is still with me after 25 plus years.
Normally, this phrase is attached to investing. Think of the times in your career when clients just had to have something. It didn’t matter that it didn’t fit within their risk tolerance or their asset allocation. They just had to have it.
Just one instance would be the internet stock bubble that burst in March of 2000. That very month a well-known investment firm introduced the Internet Strategies Fund. It was down almost 60% when it was merged into another fund a year later. You could easily think of ten more examples.
Here is another way to think of “long line – short line”. This comes from my CFP continuing education. “Human psychology, according to contrarians, is such that when any element of doubt or ambiguity (everyone agrees it is good to get out of a burning building. There is no doubt or ambiguity) exists, the independent opinion of individuals are easilty swayed by the opinion of the group – the herd instinct.
It is really important to consider the long line -short line as you are selecting investments for an asset allocation. It is also important that you can explain the long line – short line to clients who want to chase the hot dot. Saving clients from emotional decisions is part of what you do. That is a great conversation to have with a prospective client.
However….. it is also important to consider the long line – short line when you are examining your practice versus the competition. Where are the long lines – short lines in our industry? You tell me which of the following is the long line versus the short line from a practice management point of view.
A. I don’t want to reduce the number of clients in my practice. I know I have 300 relationships but those people I don’t talk with very often do a little business and don’t take any time.
OR
B. I reduced my practice to its core and am able to provide a much higher level of service to my best clients. They get more of my attention and I have become more referable in their eyes.
A. Clients don’t like to have regularly scheduled appointments. It is working fine now by just picking up the phone calling and hoping they aren’t busy.
OR
B. I decided to schedule monthly contact with my clients. Since I have only 80 households, I can get to everyone once a month with four calls a day. My practice has gotten a lot more quiet and my staff has a whole new energy level.
A. I am too busy to prospect. I wish I had time to grow like I did before I was successful. I am just too busy. Is it five o’clock yet? I am beat.
OR
B. Since I reduced the number of households in my practice I am getting more referrals from my clients. I think they really like my concierge practice for a limited number of people. I love telling the story to prospects.
Why do you think that concierge medical practices are springing up all over the country? Why are people willing to pay more for this type of medicine? People want to deal with a physician who has time to listen, diagnose and do preventive, not reactionary medicine. At Supernova we feel that clients want the same thing from their financial advisors. They want proactive contact from a financial advisor who has time to listen and guide them through their financial lives. If you would like a more in-depth view of a concierge practice for a limited number of people, I would suggest Rob Knapp’s book, The Supernova Advisor. It is available on the Supernova website or through Amazon in either hard format, digital format or audio format.