As a lifelong, very proud Chicagoan, the name Daniel Burnham became known to me early in life. In fact, it was because of him and not Frank Lloyd Wright that my first love was architecture. Ok, my first love was actually Heidi Meyer, but architecture would be a mainstay in my life long after the memory of that first kiss Ms. Meyer bestowed upon me by the vending machines in the Museum of Science and Industry had waned. The irony of the setting in which that first kiss took place was not immediately known to me. I had no knowledge that Burnham’s hand had literally formed the building around me where puppy love took root. I only knew that I loved being in that building. At that moment. And that Ms. Meyer smelled really good.
To the contrary of 6th grade romances, the tenets of architecture are limitless, bound only by the expanses of one’s mind. Science in the form of engineering bends to the will of imagination, adherently bringing a once formless thought into the world through the conduit of very real wrought iron, rivets, and glass. Neoclassical, Gothic, and modern pitifully attempt to label the creations and conceptions of men and women, whose genesis may have erupted in the mind but matured in the soul. These weren’t periods and nor should they be classified, as if to draw out some obligatory head bob from tourists when said categorization was uttered by a guide pointing to a structure. They were individual labors of love, form and time be damned. Romantic dalliances between architect and imagination that spawned creations of concrete and steel, oak and maple, flying buttresses and cantilevered decks.
I felt both angst and joy as I explored architecture, exploring detail after detail, thoughts brought to life and now encased, forever shown to the world in art deco, in bas relief, and in watchful gargoyles topping parapets. It was thought that took form, form that took function, and function in all of its glorious detail improving how we live. Burnham was known to be a visionary. He famously implored us to “make no little plans; they have no magic to stir the blood.” To him, there was something to this dreaming thing and there was power when you allowed yourself to dream big. To Burnham, the secret sauce lay in dreaming and the bigger the dream, the more power it held. To Burnham, in fact, dreaming small meant those dreams “probably themselves will not be realized.” To Burnham, we should all “Make big plans.”
The case for having financial planners make big plans now is more relevant than at any other time in the history of our industry. Never before has the speed at which change is occurring been experienced as it is now. We all recall that 2017 was a tumultuous year. 2019, although not a book-end, was a partner to the shift. I am not a market expert, not an economist, so I must rely on what I see as well as what I read to form opinions about the world around me. The DOL ruling in 2017 fundamentally changed the way the financial services industry viewed advisors, repeal or not. In 2019, total balances held in passive funds overtook active funds in the U.S. marketplace for the first time in history1. The leveling of costs borne by the investor (2017) combined with the shift away from real-life fund managers that garner real-life compensation and deliver lower than index performance (2019), should be sending flares up everywhere for financial advisors. People aren’t shying away from investing, but the trend is clear as they plan for their futures. First, your clients are demanding transparency and, second, your value has been officially disconnected from generating superior returns. Let me reiterate that second part for you; your offering as a financial planner has been divorced from affirming you offer a comparatively better path to achieving client goals via outperforming indexes. As Gorilla Monsoon famously postulated, “Stick a fork in [it]. [It’s] done!”
You and I both understand what 2017 was about. By and large, to most ethical, high integrity planners, the change was a non-event. A little more explanation on paper to the back office. A couple of extra disclosures to the client. A lot of added training and certification of understanding. But did your relationship with the client materially change at that moment? I would argue that it didn’t for most of you. That is because 2017 was all about addressing the cry for transparency and most advisors, in my opinion, are already transparent with their clients. That isn’t all what 2017 was about, but that covers a vast majority of it. What it did, however, was set the stage for 2019 and beyond, and that is a signal you should really start paying attention to. My survivalists know already. They are shifting. They’ve seen the waves of change forming for some time and understand that you can either prepare to ride them or get swallowed up by them. Either way, those waves are coming.
This much is clear; the client has spoken, and you have choices in how you are going to address them in reply. One path might be to join a firm and adopt their processes and procedures for building a book. There are many firms today who are chock full of client acquisition strategies, nay, client care strategies (there is a difference), that are excellent, proven pathways to proliferate the number of households an advisor would have to work with. The explosive growth of TD Ameritrade, Charles Schwab, and Fidelity offices over the past decade only serve to confirm what the market is bearing. No need to expound on this, suffice to say that those firms are serving to exploit a segment of the investment client population that seeks low-cost advice and high-level convenience. Nothing wrong with that. And to the unwilling, which we have discussed before, this becomes a very attractive professional home. You don’t have to adapt much, the firm provides the strategy, and you execute to the procedural points, leveraging the firm’s value proposition. You veer when the firm veers. It’s not your car. Every hard left literally demands you roll with it.
Another path might be to “grow in place”. Sentient advisors, the willing, understand that all things change over time and to survive, you must adapt. Adaptation is change and change means growth in some aspect. Perhaps for those advisors willing to change, a new firm isn’t the solution. Perhaps what enables them to offer clients the best version of their professional selves is to add elements of their passions to their existing practices in distinctive ways. In doing so, they bolt additions of their thought and imagination onto the framework of the practice, strengthening cracks formed by an evolving industry. It’s not a new framework. It’s not even their framework. But there are pieces of the framework they can point to and affirm that they “fixed” that crack (a lagging process) or that squeaky floorboard (an outdated procedure). For example, enhancing the way they profile, using the firm’s tools but overlaying their individual story above the data collection, creating a more “human” advisor-client experience, might be a way of growing in place. The profile didn’t change, but they added a new element to it.
This is not to say that there isn’t merit to growing in place for a lot of advisors. To bring it back contextually in the form of architecture, consider the willing to be much like rowhomes. Their beauty lies in balance, symmetry and multiplied function. I appreciate the simplicity of their function, after all, they are homes. They represent an advancement beyond renting or leasing in that you gain ownership. But to compare them to a custom-built home, one formed from the collaborative efforts of homeowner, architect, engineers, and builders, is to do a grave disservice to all. There is literally no thought given by the owner as to the design of the structure. You inhabit it. You don’t create it. Rowhomes are measured convenience. They may be beautiful measured convenience, but the rowhome dream is one of home ownership. The dream of the custom build is one of design and distinction. Both are homes. Both are dreams. Both have merit. There is no judgement in that. One simply carries a larger personal requirement than the other and, I would argue, both a greater sense of fulfillment and commitment to seeing the dream brought to life.
The third path to answer clients is to disrupt the status quo and the peerless are acutely aware of that. In fact, they are the architects of disruption. There is a danger in being disruptive, though, as it catapults you to the front of the line of client-acceptance and professional judgement, the creative destruction of your thoughts and postulations put on display for all to appraise. There are benefits for assuming that risk, too, however, and most of those center around a single skill; the ability to see opportunity within the marketplace. The aptitude to answer a need with a solution whose novelty inspires further examination is a trademark for the peerless.
I have always looked at disruption with joyful fascination, probably because I was an economics major and being formative at the time of my education, that bit about disruption being good for our economy stuck with me. I also really like an underdog story and movies where the renegade wins in the end (It’s a Wonderful Life, all the Rocky’s, etc.). George Bailey was a disruptor. Rocky Balboa was a disruptor. Erin Brockovich was a disruptor. The Baileys built affordable homes to allow people to escape the Potter’s Field slum conditions. Rocky overcame squalor to win an ‘against all odds’ victory. Erin Brockovich took on corporate America to fight corruption. By the way, I know the first two characters are fictional. Maybe. It doesn’t matter. Disrupting the status quo, being labeled as a renegade, and making the decision to persevere meant Big Dreams were possible and looming on the horizon.
Before you ask, let me address George Bailey. For those that have seen the movie, you know that we are led to believe that he gives up his big dreams of building skyscrapers and traveling the world. Doesn’t that just make him part of the willing and not peerless? The view from my perch tells me he’s the most peerless of all. In the scene before he runs out into the winter night, he epically loses it. He is yelling about the kids, the house, and in the midst of this infamous rant, he walks over to, wait for it, his drafting table and angrily sweeps drafts and blueprints off of it onto the floor. That is an important point that a lot of people gloss over. No, George Bailey never stopped dreaming. He purposefully, deliberately delayed his dream to enable all of those others to come to life, but he never stopped. Some dreams just take longer to come true. That is perseverance.
The irony in all this dreaming big and disruption and renegade talk is that they actually enable the dream to come to life. It isn’t purely ethereal. It just starts there. Burnham, as it turns out, was right in telling us to make no small plans. Those weren’t idle words emanated from a man with his head in the clouds. Consider this. While it may be easier to just go with the flow, join a broker-dealer that does the prospecting for you, has an established referral program for you, has a book of business for you, was that your dream? When you were first starting out, did you dream of going to a program where you sat at a desk and took all the orphaned clients from an advisor that had just left and got them to like you? Was your dream to establish a rock star relationship with the tellers at a branch you served to make it simpler to refer potential clients to you? Did any of those descriptions make you harken back to your day one vision? Probably not, but there are many advisors out there currently deluding themselves into believing that those activities are putting them on the path to being peerless in some aspect. Those activities aren’t borne of dreams, nor are they peerless.
The dreaming big piece for advisors always, always, always comes back to one item; advice. That is what you envisioned, and you envisioned dispensing that in grand fashion, didn’t you? Of course, you did! You know what your office, suite, floor, building, locations, whatever, looked like then and you still do now. And I will proffer to you that grand should be in quotation marks because, to some, simple is perfectly grand, while to others extravagant wins the space battle for gray matter. That dream wasn’t small, it was “grand” and it was all about you and how your interacted with your clients to dispense advice. Right?
And it is in that very moment of acknowledgement, that you and I both know that dreaming big is the answer to the question of how to address your clients going forward because it addresses the distinction, the gap from where you are now to where you want to be. You fulfill your professional promise only when you vow to become peerless. If there is an incongruency between the little voice in your ears and what you acknowledge you are building today, congratulations! You are among the willing. If that incongruency inspires you to take action, especially massive action, meaning dreaming big, well, then, bully for you! You have paid the toll and may enter the highway that leads to becoming peerless! But wait. Did you think that simply because you allowed yourself the luxury of acknowledging that little voice that you would acquire ‘peerless-nicity’? Not so fast. You are on the on-ramp, not the exit. There is so much more to be seen and experienced on this highway.
The disrupters sit on the cutting edge of change, yes, because they are willing to take action, but there’s another reason they move from being considered among the willing to those that become peerless. It is that reason that propels you down the highway towards achieving a peerless practice. They identify areas of opportunity and not only do they do that, but they do it in two ways; one promotes their knowledge and talent in an area of distinction, ok, but the other acknowledges a higher purpose. Perhaps that isn’t even the right messaging. They epitomize the higher purpose. They are committed to the higher purpose. In other words, the peerless not only solve problems in ways the masses don’t, they do it in ways people are drawn to them.
Remember George Bailey? Mr. Martini broke open the jukebox to help him when he needed cash. Violet gave up her dream of running away and repaid his loan. Annie the maid even gave George the money she was saving in case she ever got divorced (she wasn’t married)! Rocky Balboa? Mickey trained Rocky because he knew that without a manager, Rocky’s career would never rise to its greatest potential. Erin Brockovich was not only hired by her would-be benefactor attorney, Ed Masry, but rehired by said attorney after being terminated! Fictional or otherwise, it doesn’t lay waste to the notion of a pull to a higher purpose and to further illustrate it’s drawing power. Were you and I to share coffee with one another, we could spend hours discussing real-life George Baileys and Rocky Balboas (Henry Ford, Madame Curie, Frederick Douglass, etc.). I use Bailey, Balboa, and Brockovich because of who they represent. They embody the peerless heroically.
So, if an agreement to action is the toll and disruption is the pathway to a peerless practice, the higher purpose without question becomes the vehicle to take you there. Recall that I claimed that volume rides shotgun to the unwilling on their journey. Who or what rides shotgun to the willing? To the willing, and furthermore, to the peerless, distinction is their front-seat passenger. In many ways, it becomes their navigator. Once you make a commitment to adapt (grow-in-place or seek new pastures), once you identify problems that you are passionate about solving, two issues quickly emerge; how do you identify who has that problem and how do you solve that problem better than anyone around you using your unique talents and skills.
That is next week’s discussion.
Next week: Renegades, Refinement, and Resources
For Financial Professional Use Only. Terry Newman is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. CRN-2781804-101719