Financial Planning 101: Knowledge is useless without ACTION

WRITTEN BY: Gideon Drucker, CFP® AIF® ECA

Overcoming inertia is one of the most important reasons to hire a financial planner.

I have had so many calls with prospective clients (keep in mind, these are people that reached out & scheduled a call WITH US…not the other way around) who love everything we have to say on our initial call, realize that they have some large gaps in their planning in need of solving and yet can’t pull the trigger to actually get started.

Then 6 months go by, and they reach out again, except this time they schedule their next meeting within 2 minutes & tell us they’re ready to get started on that very first meeting. What changed?

They probably realized that all the information in the world didn’t matter if they didn’t have someone in their corner that would get them to act.
They probably looked up one day and realized that 6 months had gone by from when they first committed to setting up a financial plan, and while they had done research, read books, and felt more educated…NOTHING had changed for them. 6 months without improvement.

I remember on a Right Fit Call I had with a potential client a year ago who started by saying that she’s taken the last year to “learn” and “research” what’s out there when it comes to her finances….that she’s really not looking yet to do anything, she just wants to learn.

While I normally would have just used our time on the call to try to answer the questions she wanted to ask and then wish her well (knowing that she’s not serious about improving her financial situation), I couldn’t help myself but ask if she feels like she’s in a better financial spot now than 1 year ago.

I wanted to know if her financial decision making/behavior has changed since she started seeking out advice? Was there anything that she acted on & improved upon?

I wanted to know what tangible/real world value she has received for all of these hours she’s spent gathering information.

So committed to “exploring”, I don’t think she realized my point.

My team’s job is to help clients become aware of problems they didn’t know they had and show them the solution.

If the client does not take ACTION (implement the 401k fund change, complete the Roth conversion, re-title their brokerage account, change their beneficiary, set up their Backdoor Roth) then we have not provided real value.

Good ideas not implemented are just as useless as bad ideas.

This is how we measure ourselves….did we inspire/educate the client enough to actually make the changes they need to?

This is not school. You do not get points for knowing what to do or understanding the mechanics. Your financial standing is only improved if you actually change your behavior or implement the tactical changes required to put you on better financial footing.

My advisor team constantly keeps it top of mind that when it comes to building financial plans, we get paid to provide value, not volume:

This means that having more pages in the client’s financial plan doesn’t mean we did a better job.
Longer zoom meetings with the client does not mean we did a better or even more comprehensive job.
NO, value is only measured, as far as we’re concerned, by the action we inspire the client to take.

I would ask you to think along the same lines in your world. With so much information out there, it’s easier than ever to get bogged down doing “research”, reading how-to books, seeking out 15 different advisor thoughts, and getting educated.

Has doing that ever moved you to action though? Is that really the best use of your time?

Here’s the point: It’s not what you know. It’s what you actually get done that matters.

I am available to speak over a 15 minute Right Fit call if you feel you could use some help navigating your financial situation.

Together, we can determine if our Financial Life Plan® process is the right fit for you.