Why a Knowledge of History is Vital in the Wealth Management Sale

As unpalatable as it may be, I’d like to ask you to think back to high school English class when you were asked to write a theme in which you compared and contrasted two characters, situations, or stories. It seemed boring or even obtuse to the learning process, but I bet a dollar to a donut that by now the value of this thinking process has become clearer to you. Why? Because it helped to show the value of context and relativity…two critical items that not only help develop a mature thinking process but also can make the process of managing client relationships or selling (either one) significantly easier for the wealth manager.

Why do Clients and Prospects Desire a Wealth Manager with Knowledge?

  • Clients and prospects alike want to do business with someone possessing credibility.
  • The ability to bring context to the discussion is a huge credibility catalyst.

In training sessions, we ask managers to “tell us about the market crash.” As you might expect, the answers are wide and varied. They usually depend on the age of the person and the breadth of knowledge they possess about investment history. If the investor is 65 years old and the only market crash the money manager or sales professional can discuss is the one in 2008 or even the one in 2000, the perceived ability to compare and contrast the current market environment with numerous other relevant periods erodes the credibility of the investment professional.

How to Bring Depth and Context to the Wealth Management Conversation

  • Become a student of investment history. In his own homespun manner, Will Rogers said, “history doesn’t repeat itself, but it rhymes.”
    • An understanding of multiple bull and bear markets, of all types, should be studied. Start with “Tulipmania” of the 17th century and proceed through history.
    • Know the cause and effect of the great crash that began in 1929, but whose seeds were sewn in the mid 20s.
    • Learn about the 60’s, the bear market of the early 70’s, and the subsequent bull market that, with a few minor interruptions, ended with the equity crash of 2000.

This expansion of your historic investment knowledge will not only give you added confidence in communication with clients of all ages and experience, but it will also enhance your credibility tremendously. As you go through this process of development, make sure you go back and thank your high school English teacher. However, have him or her sit down before you thank them…they may faint on the spot.

To learn the important lessons from Visit our Course Catalog to see our online course on Lessons from Financial Market History to learn more.





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