What Advisory Clients Want vs What Your Firm Offers

Understanding the Three Categories of Knowledge in Professional Advisory

The Knowledge Pie Chart

There are three distinct categories of knowledge that every professional advisor should understand:

1. What You Know
2. What You Know You Don't Know
3. What You Don't Know You Don't Know

Breaking Down Each Category

1. What You Know

• Things you're confident about and can execute
• Skills you've developed
• Knowledge you've mastered Example: Like someone who grew up surfing in San Diego and knows how to surf

2. What You Know You Don't Know

• Skills or knowledge you're aware of but haven't mastered
• Areas where you recognize your limitations
• Things you could learn if needed Example: Like knowing you can't speak French and being aware of this limitation

3. What You Don't Know You Don't Know

• The most critical category for advisors
• Opportunities you're missing because you're unaware they exist
• Solutions that could help clients but aren't on your radar

Why This Matters: A Real-World Example

The Cost Segregation Case

• Client owns a manufacturing facility worth $2.6 million
• Struggling with cash flow
• Can't hire needed employees or buy equipment
• Potential solution: Cost segregation study
• Possible outcome: $450,000 in first-year cash flow improvement

The Ripple Effect of Unknown Solutions:

• Impacts the client's business growth
• Affects potential new employees
• Influences equipment suppliers
• Determines business's future success
• Changes advisor-client relationship value

The Goal for Professional Advisors

Not About Becoming an Expert in Everything

• Don't need to master every strategy
• Focus on awareness rather than expertise
• Move knowledge from "don't know you don't know" to "know you don't know"

The Flight Analogy

• You don't need to know how to fly a plane to use air travel
• You need to:
  1. Know air travel exists
  2. Understand its benefits
  3. Know how to find a competent pilot

Applying This to Advisory Services

• Recognize various planning opportunities exist
• Learn enough to identify when they might be relevant
• Know how to connect with the right specialists
• Focus on having meaningful client conversations

Key Takeaways

1. Awareness is more valuable than expertise
2. Build a network of specialists for different solutions
3. Focus on moving knowledge from unknown to known
4. Understand that what you don't know can significantly impact clients
5. Maintain curiosity about new solutions and strategies