(B1) Building A Business On Decency Principles, A Story From Mike Brady, Financial Planner

I remember walking out of an interview with KPMG, second semester senior year at Widener.  I had just received notice that I would win the Accounting Prize; something I had coveted since my freshman year.  I loved Accounting, or so I thought.  However, during each interview I realized more and more that while I loved to budget, plan and execute financial goals, I hated the idea of sitting in a cubicle, analyzing numbers all day, and reporting up a corporate chain of command.  I realized I couldn’t be an Accountant and letting these companies know that was the decent thing to do – for them and for me.

I enrolled instead in Widener’s MBA program and on day one – in class one — I figured out what I wanted to do. I had elected to take Financial Planning 600 and, upon reading the syllabus, I immediately realized that that was my future.

I know what my gift is.  I can communicate with people and connect in ways that allow them to be comfortably guided by my advice.   In financial planning, I have the opportunity to use that gift – and my Accounting skills – to change lives.  I can assess a financial situation, build a comprehensive financial plan and communicate something that seems very daunting to just about anyone.

During my MBA program I spent most of my time figuring out how to operate my business.  Its cornerstone is my value proposition: To integrate myself into my clients’ families as their “financial doctor; the person to whom they turn to prudently guide their near, middle and long term financial decisions.  My mission is to be my clients’ total financial resource: Providing unbiased financial advice; protecting their family and assets; improving their quality of life.

Doing so, I am able to accomplish two things.  The first is my overriding client-related goal: “To place individuals and families in a better financial position then when I first arrived” (decency to others).  The second is to build a reservoir of good will that yields unlimited growth potential through referrals from existing clients (decency to self).

Within a week of starting my business, I was introduced to the Delaware County Chamber of Commerce; an association that offers networking, education and advocacy to businesses throughout our region.  The decision to take a leadership role in the Chamber has shaped my career; allowing me to use my instinct for helping others to positively impact the local business landscape and to do invaluable networking.

My hard work at the Chamber has definitely paid off.  Many of my clients have come to me through relationships that developed in the course of that work. But while the Chamber opened the door to many opportunities, my ability to deliver on my core value proposition has been the key to my success.

In my industry, the number one mistake advisors make is to gloss over the truth. But my value proposition makes the temptation to follow this path an nonstarter.  Instead, it dictates respect, transparency, and honesty in every aspect of the client relationship.

Transparency begins at the “prospect” stage.  When someone is interested in talking, my first goal is to spend time looking at what type of help they need; to see if I can deliver services they need.  The alternative – to bend my value proposition to take on a new client – makes no sense.  All it does is set the stage for a future disaster.  One of my cardinal rules is to send a prospective client elsewhere when my approach doesn’t meet their needs

A good example took place early in my career.  I was approached by a couple that, at the time, would have been one of my largest clients.  They wanted me to be a “day trader” for their money.  They had no problem with the associated transaction costs but wanted me to be available at any moment during market hours and to execute trades on a consistent basis.  But my value proposition did not accommodate these services.  First, I am a “long term” investor.  Second, I am out most days visiting clients.  Third, I do not believe you can build long term wealth by constantly making market moves.  After discussing my concerns with the potential clients, I referred them to a more appropriate professional.

Being wholly transparent about cost is another crucial element.  Too many advisors make the decision either not to discuss, or to hide, the cost of their advice and of the financial products they use.   For me, however, cost is always an essential part of the first conversation – to ensure that clients don’t experience any unpleasant surprises going forward.

Once we have an agreement on what is expected, what I will deliver, and what it will cost, we begin the financial planning process by gathering all of the client’s financial information using a fact-finder.  This document specifies in detail the client’s assets, income level, insurance coverages, and investment risk tolerance.  In my approach, full disclosure by the client is non-negotiable. Why?  Because without it, my ability to deliver on my value proposition will be compromised.

The final element is honesty and transparency in the follow-up sessions I schedule to evaluate the client’s plan at regular intervals.   This last step allows me to educate my clients on an ongoing basis, and keep them on-track to meet their goals.  It is also the best way to add new clients.  Clients who have seen me be fair, honest and attentive – over time and throughout the process – have always been my best referral source, by far.

My bottom line?  Radical Decency, expressed through my value proposition, is the centerpiece of success, both financially and in terms of professional satisfaction.

(B2) Seeking Decency In Difficult Times, A Story From Jeff Garson, Psychotherapist and Attorney

In 2005, I was striving to run a healing center – offering psychotherapy, chiropractic, massage, financial planning, and life coaching – in a radically decent way.  On the business side, one central goal was to establish a financial relationship of trust between the core group of professional/business partners.

Regarding compensation, the plan was to divide up the money as a group, with each professional having an equal voice in the decision. And our written charter offered this guideline:  Each professional’s compensation would, over time, approximate his or her financial contribution (decency to self).  At the same time, we would moderate our expectations for the sake of the business and its goal of decency in all that we do (decency to others and the world).

Easy to articulate, not so easy in practice.

Why? Because, inevitably, Radical Decency brings with it wisdom-stretching moments that are both exquisitely uncomfortable and – if we are up to the challenge – times of powerful insight and growth.  For me and my partners, one of these defining moments involved our chiropractor’s compensation.

Here’s what happened.  In our culture, chiropractic is far more lucrative than psychotherapy, coaching, or massage.  And to complicate matters, trust didn’t come easily for our chiropractor; a quality quickly triggered because he was negotiating this vitally important financial relationship with a long-time attorney – me.

As the negotiations unfolded, our model of trust quickly fell by the wayside.  Even though we’d been working together for months, organizing the business, he just couldn’t get comfortable with it.  So, after weeks of emotionally fraught negotiations, we wound up with an agreement in principle that guaranteed him 55% of the chiropractic income, with the possibility of further compensation more if the practice really took off.

But just as we were finalizing the deal, the realities of life intruded.  The chiropractor was diagnosed with a long-term medical condition that, depending on its progression, could make it impossible for him to function as a chiropractor, in a few years if not months.

So how in the world, in this situation, do you balance decency to self (me and the other non-chiropractic partners) with decency to others (the chiropractor)?

Here’s what we came up with. When our colleague reached the point where chiropractic work was impossible, we would take a snapshot of that side of the business, hire a replacement, and continue our original chiropractor’s compensation at 60% (that is, chiropractic income, multipled by .6, multipled by .55).  In addition, we would re-train him as a different type of healer, with his income from that aspect of his work to be determined by the compensation rules described above.

____________________

Was this the “right,” or the “best,” or even a “good” solution?  For me, these questions have no answer.  But I do know the episode grew me as a businessman and a person.

One lesson learned is that I try too hard.  I can see now that we were never going to get by the chiropractor’s trust issues; a fact driven home to me when – just few months into the contract – he quit, convinced he was being cheated.  In retrospect, it would have been more decent to everyone if I had called a halt to the negotiations; if I had recognized that no amount of clever problem solving and persistence was going to work.

Another equally helpful lesson is that less traditional, more decent solutions are in fact possible even to the most seemingly intractable of situations – if we persist in our efforts to be decent at all times, in every context, and without exception.