Editor’s note: In this edition of What’s Working Now, an AdvisorRADIO feature in which Horsesmouth members tell us about recent success they have had running and growing their businesses, we hear from advisor Chad Henry, who sets aside time with each new client to discuss a neglected but critical topic.
The following article includes edited excerpts of Chad’s comments. Or you can listen to the full interview by clicking the audio file below.
Quick Overview
Advisor: Chad Henry
St. Charles, Illinois
Years in business: 17
Firm: Forthright Financial Planning
What’s working now: Holistic planning, including addressing a key topic with clients that other advisors overlook
I’m in my seventeenth year of business, with a team of six people—four assistants plus a junior partner and me. We’re month-over-month, year-over-year setting new records for new assets, and over the last four or five years we’ve transitioned from mostly commission-based to mostly fee-based.
At our practice, we pride ourselves on building out processes, systems, and strategies that identify us and make us distinct. All the financial firms out there have many of the same products so to truly differentiate ourselves we need a unique process, one that provides a higher level of concierge service and incorporates unique things.
Educating our clients and prospects on many different topics gives me the opportunity to demonstrate fairly quickly to a group of people what separates me from the rest of the pack. The bottom line is that every time somebody has a triggering event—retirement, divorce, selling a business—they are probably looking at three or four different financial firms and need to figure out quickly who they are going to go with. Doing some of these educational events in the community allows me to rise to the top in that competitive situation.
Talking about cybersecurity
We educate all our clients on cybersecurity, a concern that is on everybody’s mind these days—yet there are very few advisors who include it in their financial planning process. You can hardly turn on the T.V. or look at the news without hearing about another data breach. People are concerned and want to protect themselves, but truthfully there are not many organizations that are addressing these fears.
I look at cybersecurity education as part of holistic wealth management. It is a value-add that doesn’t necessarily turn into any income for my firm, but I think providing it builds trust and confidence. As they say, clients have to know you care before they care what you know. If I can provide some guidance in early meetings to help them get their cybersecurity house in order, that speaks volumes and continues to build the relationship while protecting the client. I always think that if you do the right thing, good will come back around.
Personal cybersecurity coaching
With each client, we do a 30-minute call specifically on cybersecurity issues. We go through and take a look at the different areas of vulnerability. I talk about a lot of the topics mentioned in your book, Hack-Proof Your Life Now! The New Cybersecurity Rules: Protect your email, computers, and bank accounts from hacks, malware, and identity theft. I had a good deal of knowledge, but when I picked up your book and read it a couple of years ago it enhanced some of the things that I was already doing and also gave me some new ideas.
I start off by talking about password managers. A lot of times you find out that a client’s system for passwords is an old notebook or a sheet of paper that is at their desk at work. Often, they’ve used the same password for multiple sites for multiple years—and it is something that if you knew the person, you might be able to get the password. I talk to them about the importance of the randomness of the password. I talk to them about not using a piece of paper that anybody could stumble across and find and be able to log into and breach their security.
So I will tell them about some of the different password managers that will keep their information safe and generate new passwords or give suggestions for passwords. I explain how some of them will allow them to sign into multiple platforms by using a fingerprint or biometrics to keep their identity secure. It allows them to carry all of their passwords with them wherever they go by having a password manager app stored on their phone.
In addition to that, I talk to clients about two-step verification on their most important accounts. I also talk to them about adding passcodes. Often you see people that have all of their information on their smartphone and don’t have it protected at all. If they were to lose it, anybody could access that information—I talk to them about that.
More topics we cover
I share with them the importance of creating a secret email that is for their financial accounts only so they aren’t using that same email address for their friends or to sign up for discounts at department stores or free giveaways online. I explain to them that they don’t want to be using that email address for their finances because it has been shared with hundreds of different sites—all of which could be hacked into.
I encourage everybody that I work with to request their free annual credit report, to get an idea of what exactly is going on with their identity, to make sure that everything on there, they recognize. Is there anything on there that could be fraudulent?
I also talk to people at length—and I think it’s a great practice—to set up email and text alerts for different banking and credit card transactions. For example, I have all my credit cards set up so if there is a charge for more than $50, it automatically texts me an alert. I can tell right away whether or not it was me. I know many of the credit card companies have great fraud departments and work very diligently to make sure that you are protected, but setting up these alerts makes you more proactive and you may catch the fraud sooner.
We do a number of things as it relates to making sure that our clients’ identities are protected through actions like a credit freeze. We will walk clients through how to set up and freeze their credit so that nobody else can open new accounts in their name.
They say the average person who has their identity stolen spends tens of hours actually fixing the situation— from filling police reports to contacting the credit bureaus and financial institutions to prove that the fraudulent charges and accounts were not made by them. You can imagine the conundrum that it causes when they have to explain that it is their name and Social Security number but not their charges. You can imagine how much red tape and the headaches that causes for a client to get corrected.
Providing information and accountability
We don’t want our clients to get overwhelmed with all of this information and actions related to cybersecurity so we break it all up into bite-sized pieces. We try not to be the teacher that gives so much homework that it paralyzes the class. We give one or two assignments and then do a follow-up call four to six weeks later to see if those assignments were done. Then we move on to assigning the next actions. A lot of times, someone on the team will give a courtesy call before that fourth week to check in and see if they need any further direction or help from us. We position ourselves as the coach. We try to make it as easy as possible. We want to make sure that it actually gets done. Because it is in their best interest and it is really important to us that they are fully protected.
Don’t shy away from the topic
When it comes to cybersecurity, generally you won’t get stumped by really advanced questions from your clients. Like I mentioned earlier, we all know somebody that uses a notebook or piece of paper to keep their passwords on. So as an advisor, if you just have the basics in place, you’re going to be able to help. You don’t need a degree from MIT to help your clients with their cybersecurity.
I think so many people just hope that it will be OK just like everything else. If you hope that you can retire but don’t plan for it, the likelihood of you having a good retirement is probably very low. It is the same thing for cybersecurity. You have to be proactive and have a cybersecurity plan as a part of your overall financial plan.
How I learned
For me, there was no better place to learn about cybersecurity than from Horsesmouth’s Savvy Cybersecurity program—the material is phenomenal. You can use that as a resource and learn a lot about the actions that I have mentioned. Your book, Hack-Proof Your Life Now! The New Cybersecurity Rules was a great read. I sent it to 25 or 30 of my best clients as a gift a few years ago so they could learn about these practices.
There is always an opportunity to learn more about the topic. Most of the financial conferences offer a session or two on cybersecurity. Maybe that gives you a couple of good ideas to add to your process for educating your clients. And there are always new articles on the topic in different industry magazines that can also get you up to speed.
It’s ever-evolving. It seems like every month there is a new way that the cybersecurity bad guys are trying to take advantage of people. There are always new concepts for protecting our clients. You don’t have to call yourself a cybersecurity expert, but it sure does go a long way if you can give them, say, 10 cybersecurity steps that the advisor down the street didn’t discuss with them.
What our clients think
The response from our clients has been a sigh of relief, in most cases. Nine times out of ten, no professional has addressed this with them before. It really does show you care, because it’s not a profit-center and not something we charge for, but it’s part of holistic planning for their financial life. If you can help them avoid the pain of dealing with an identity theft or a security breach, I think that’s a lot of goodwill and very much appreciated in this day and age.
The response from actively working with clients on cybersecurity has been overwhelmingly positive. They appreciate a professional in their circle taking a look at some of these issues that are top-of-mind but nobody’s really addressed. It’s scary to a lot of people because they, quite frankly, lack the knowledge to be able to help themselves. I think it’s the right thing to do, and clients just absolutely love it. When we address issues like this, I think it shows them that we care, and then in return, it builds the rapport and the relationship that we have with them.
My advice
If you want to incorporate cybersecurity education into your practice your first move should be building some knowledge, whether it be reaching out to Horsesmouth to take a look at the training and the webinars and the different offerings that you have, or whether it be looking throughout the industry. I truly haven’t found anybody that has the in-depth offerings that Horsesmouth has for financial advisors, to be able to educate us quickly and empower us to help our clients better.
You may also consider getting feedback from your clients. Ask some of your best clients what they would like to see you offer that you currently are not. It’s important to be in tune with your clients and listen to their feedback. Then you can figure out how to address those needs.
It is important to differentiate yourself through your own process and strategy—something that isn’t anything like the person down the street or a corporate cookie-cutter strategy built by someone in the ivory tower that has never met one of your clients. It resonates with clients and prospective clients when you have taken the time to educate yourself and have built something that is specifically tailored towards their needs.