“So, what do you do?”
“I’m a financial advisor.” (Not true.)
“Oh, so you pick stocks?”
“Yep!” (Also not true.)
(With apologies to “Office Space”)
It’s funny how after many years in this business my response to the question of, “What do you do?” has shifted.
I used to attempt to explain that Blueprint Investment Partners supports financial advisors by building diversified portfolios, providing execution services, and delivering content they can use as they grow their practices. This response usually elicited a glazed look or abrupt subject change.
Now the conversation often looks like the template above. I usually tell the person I’m a financial advisor – even though this isn’t technically true – because most people either have one, know one, or know someone who uses one. It’s simply a more relatable and understandable response during perfunctory social situations. If the person asks a follow up, it’s usually based on an assumption that being an advisor is all about stock-picking.
The point of this anecdote is to highlight the surprisingly common misconception that being a financial advisor is all about stocks. At Blueprint Investment Partners, we believe this is actually one of the least important services an advisor offers their clients. While building and executing portfolios is important, without other building blocks in place, clients are unlikely to achieve their financial goals.
Where does this misconception that financial advisor is synonymous with stock-picker come from? Surely pop culture has its influences. Movies like “The Wolf of Wall Steet” or “Boiler Room” are examples.
But advisors can feed into the misconception as well. For a long time financial advisors and brokers were synonymous, as stock picking was a big part of the role back then. However, we think too many advisors are hanging on to legacy tasks that may have been important for them to perform in the past but are incongruent with a modern, growth-oriented advisory practice.
Financial Advisors Should Consider Opportunity Cost
Rather than try to carry the world on their shoulders, we believe top financial advisors have evolved their practices so they can focus ONLY on high-impact activities, while outsourcing anything where they add the least value relative to the time commitment required.
Figuring out where to draw the lines takes some self-reflection about questions like: What do I do best? How do I want to be remembered?
Another way of self-reflecting is to put yourself in a client’s shoes and ask questions from their perspective: What do I value most form my advisor? Is it truly portfolio management and stock selection? Or perhaps what matters most to me is that my advisor can:
- Create a financial plan that’s tied to a goal, then help me stick to it
- Build and sustain an authentic relationship with me so I feel like my advisor is truly listening, willing to offer me time and attention, and demonstrating an understanding of my unique circumstances
- Generate research and content (e.g., newsletters, economic outlooks, etc.) that helps me understand what’s happening in the markets and gives me confidence that my advisor is looking out for my best interests
Next, it can be instructive to consider what distracts you from being laser-focused on what matter most to clients and for growing your practice. Distractions often include:
- Trading, portfolio research, and asset management
- Employee issues
- Day-to-day operations (e.g., paying bills, dealing with tech, etc.)
Focus on the Wildly Important
Books by Cal Newport, which include “Deep Work” and “A World Without Email,” have been influential for the team at Blueprint Investment Partners. We think they have enormous applicability for financial advisors as well, and we highly recommend them.
In “Deep Work,” Cal references the book, “The 4 Disciplines of Execution,” which begins with “Discipline #1 – Focus on the Wildly Important.” Cal writes:
“The more you try to do, the less you actually accomplish. … don’t try to say ‘no’ to the trivial distractions you find on the information smorgasbord; try to say ‘yes’ to the subject that arouses a terrifying longing, and let the terrifying longing crowd out everything else.”
“Deep Work” offers both a WHAT and a HOW for financial advisors (and anyone who seeks greater focus in their life). First, you must first identify where your focus should be concentrated. WHAT is most important for you, your practice, and your clients? Next is HOW. How will you arrange your schedule and workflows to support this new paradigm?
Our HOW is Systematic Processes (It Can Be Yours Too)
Here’s a concrete example of how Cal’s principles are at work at our firm.
Our HOW is being systematic:
- Repeatable investing strategies. Our strategies are rules based and automated where feasible. This minimizes the amount of willpower needed for investment decision-making, and it removes emotions from the equation. We simply follow our pre-determined rules, again and again. Once financial advisors and their clients understand our systematic investing rules, they know what to expect in all market environments; there should be no surprises.
- Services that help financial advisors systematize their practices. The services we provide for advisors and their clients are meant to allow them to systematize their own lives as much as possible. Advisors can count on us for strategies but also for execution support, such as cash management and custom trading. We also offer marketing support in many cases. We aim to harness the efficiencies our repeatable processes have created within our own firm and pass those along to our partnering advisors. This enables our partners to focus on what they do best and enjoy most.
- Systematizing day-to-day operations. Our philosophy of being systematic extends all the way to how we run our organization and even how we conduct meetings. We follow the Entrepreneurial Operating System, a set of simple concepts and practical tools that have helped thousands of entrepreneurs get what they want from their business. It’s a model that is readily applicable to financial advisory practices as well.
We believe these and other systematic processes allow us to say “yes” to our terrifying longing, which is to disrupt the ordinary relationship between asset manager and financial advisor. These processes also help us achieve consistent good-ness rather than occasional great-ness.
Radical Change is Your Next Step
A key takeaway from Cal in “Deep Work” relates to how to move forward. What stands out to us is what he calls the “grand gesture.” His point is that rather than wait for inspiration, the “grand gesture” helps rewire your brain to focus on the task at hand. He suggests that we should make:
“… a radical change to your normal environment, coupled perhaps with a significant investment of effort or money, all dedicated toward supporting a deep work task, you increase the perceived importance of the task. This boost in importance reduces your mind’s instinct to procrastinate and delivers an injection of motivation and energy.”
We would like to believe that partnering with Blueprint Investment Partners IS the grand gesture that many financial advisors and their clients need. However, even if partnership is not a good fit for you for whatever reason, we encourage you to take the time to apply the other principles to your practice: Identify what is most important for you and how you’ll obtain a higher level of concentration in those areas.
Getting deeper is probably not as much a destination as it is a journey. We think consistency compounds, and stacking one good decision on top of another can yield a massive harvest of benefits over time. If you have a similar belief and have any tips or success stories, we’d love to hear them. Please reach out anytime.
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