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I was recently reading an article where a nutritionist was commenting on the pluses and minuses of using rules of thumb and other broad-based rules in giving diet and fitness advice.  Her hypothesis was essentially that the person dispensing the advice needed to embrace one of two positions.

Everyone is alike.

Everyone is different.

A simple concept, but it makes a lot of sense.

On one hand, you go for a certain level of scale and attempt to make your advice suitable to everyone.  This likely means watering down the content or using blanket statements to get your message across.  Carbs are bad, everyone should consume 2,000 calories per day, that sort of thing.  Sure, absent any other advice, it’s not likely to be harmful, but how effective is this style of advice in actually creating meaningful results for those looking to fine tune and improve their diet?

On the other hand, you decide that your area of expertise isn’t scalable.  That nutritional needs vary.  That it’s important to get to know an individual’s health history, eating habits, activity level and other pertinent details in order to deliver an effective plan.  That while we all share much in common, how we interact with certain foods, the habits we’ve developed that help or hinder our progress and other factors are all sufficiently unique and require understanding to achieve success.

This can be a tough choice.

Door number one offers broader reach, expands potential impact and, if successful, almost certainly helps the person dispensing the advice achieve a higher profile and profit.  Think of all the diet and fitness gurus, reality show and daytime talk experts or the infomercials out there targeting the masses.  The goal is to have your message reach as far and wide as possible.  Why?  Because it’s ultimately not advice that these people are selling.  Their goal is to get you to watch their show, buy their shake mix or exercise machine or book or… you get the idea.  Whether or not the audience ever solves their problem or achieves lasting change is not the primary goal or concern.

That’s not to cast these types of gurus as inherently bad.  Without them, perhaps no one gets off the couch and gets moving, eats better and looks into a customized plan that will work best for them.  Sure, some people end up buying the treadmill that becomes a clothes horse or the shake mix that rots in the pantry, but no one is truly harmed.

Door number two, offers more challenging, but arguably more rewarding work.  Choosing not to scale your message in favor of hopefully having a positive impact on a smaller, but more receptive audience.  This path means reaching people ready to hear you and more likely to act on, benefit from and value the guidance provided over the long term.

If you’ve been reading my blogs long enough, you likely know where I’m going with this.  Yes, of course this applies to the business of financial planning. 😊

Even beyond the obvious talking heads on TV, radio, infomercials and the like, the financial advice business can be scaled.  If you attend a financial services conference, you’ll undoubtedly encounter vendors who have paid substantial sums to sell advisors various products or services promising to help the advisor or advisory firm achieve greater scale.

These products and services vary widely, but many have something to do with technology or techniques to help you segment clients and/or advice offerings.  Others help you do things like rebalance all client accounts with the click of a button, market to a wider audience, and ultimately reach more and more clients without having to use as much time, money or talent as you do today.

Much like the diet and fitness example, there’s nothing inherently wrong with this approach.  Many firms have been successful with this model, growing assets under management and clients by the busload.  It can be very profitable and help large numbers of people who seek financial advice.

But much like the broad-based nutrition advice mentioned earlier, it is difficult to balance between how much scale is too much.

To the extent that the advice helps someone start saving toward a goal or making better decisions around debt, great.  When does the message get so broad that you risk having someone act on something that’s not suitable for their needs?  When do tips become so removed from the intended audience that they lack anything in the way of accountability or a feedback loop to make sure everyone understands the appropriate application to their plan?

It’s been an important and intentional choice for TAAG to grow in a controlled manner.  Door number two is our preferred path as we believe it offers a clear, more rewarding path to success, both for our clients and our firm.  Meeting clients wherever they are in their personal financial journey, learning about their specific goals, building tailored plans and then helping them execute on that plan every step of the way is what we believe truly delivers a successful experience and lasting change.

Financial planning is often about maximizing seemingly immaterial, incremental opportunities to ensure long term success.  While we’re all quite alike, these opportunities can vary widely and create the need for differentiated advice.  Using technology and other tools to scale where helpful for our clients is important.  One on one, meaningful conversations to help us understand every one of our clients’ needs will always be the bread and butter of our model for success.