Chapter 1

1. Building a System That Rewards Doing Good

Many companies have what they call guiding principles or core values. My colleagues and I live by both. Our guiding principles—client-centric, legal transparency, corporate and community citizenship, and non-competitive posturing—are strategic precepts that give us structure and direction for how we contract with vendors and other partners to position ourselves to best serve our clients. These principles do not waiver, regardless of the changing financial environment. They’re how we do business.

This book is about something deeper than guiding principles. It’s about the core values that guide our behavior—how we feel about our clients, and how we interact with them. This goes beyond the rules of business. It’s about the assumptions we make about the people we know and those we have yet to meet. Values-based beliefs are the foundation of values-based relationships and are ultimately the key to becoming a values-based advisor. A true values-based advisor calls upon their wares to create and deliver a values-based experience in their advice and in every aspect of their practice. My decision to integrate my deep-rooted personal beliefs and aspirations into our business was a great leap of faith. Fortunately, my colleagues now embrace this philosophy and consider these core values to be our company’s most valuable assets.

Your Greatest Assets

Our core values are based on five Hawaiian words: Mahalo, Aloha, Ohana, Pono, and Imua. While I’m not of Hawaiian blood and don’t speak the Hawaiian language, I am part of a fourth generation of Kagawas born in the state of Hawaii. I can’t help but selfishly make claims to its land and culture, and I’ve adopted these words and taken certain liberties in how we interpret them to represent our core values. With all due respect to true native Hawaiians and the sanctity of the meaning behind their beautiful language, these words closely align with the values I learned from my mother and my father. They also align perfectly with what I believe about how people can interact best with one another.

Mahalo means thank you. This is the word I use for living with gratitude and the importance of appreciating everything in my life. With Mahalo, you are grateful for the people in your life, and you appreciate their differences, too. You appreciate how they look at life and act in life, where they come from, and where they’re going. You’re thankful for the good fortune to meet many different people on life’s journey. As a financial advisor, you deal with people from all walks of life with differing beliefs, opinions, and priorities and an endless array of opportunities to express Mahalo.

Aloha means many things, most commonly hello and goodbye. The meaning of Aloha I prefer defines how I seek to live and work. It’s to do so with love. Deferring to the core value of Aloha insists on treating yourself and the people around you with love. You care for others and listen and share with them openly, willingly, and with hope. You understand that people and their opinions are neither right nor wrong and that they’re simply different. Treating people with love or Aloha changes how you feel about them and makes you want to do your best for them.

Ohana means family. This core value guides me to treat other people the way I treat the members of my family. With Ohana, you are honest and forthright and never knowingly lead others astray. Sometimes Ohana means telling people things they don’t want to hear yet need to hear for their own good, and you do it with the intent of helping them satisfy their desires—even when they can’t see this for themselves. Sometimes, Ohana requires you to hold people accountable. It’s not easy to do this, and people may not always agree with what you have to say. Again, think of how you treat your family. Think about how you speak with the people you care about the most. Your conversations aren’t always agreeable, yet you dig in and have those talks anyway because you care about their outcomes. When you’re truly committed to your clients, you treat them like Ohana. You’re there for them not only when you’re working together on their financial plan but whenever they need you. Your door is always open, you’re always kind and welcoming, and you’re also committed to being truthful. You may even treat your competitors like Ohana, with the same honesty and the same high expectations and accountability that you show family members.

Pono means to do the right thing. It means to live with righteousness—to do the right things for the right reasons. No one is perfect. If you seek to live your life with Pono, your good intentions in your plans and actions are certain to reflect your desire to do right.

Imua means always move forward—to keep learning and continuing to grow. With Imua, you evolve and become more skilled, more compassionate, and more valuable to yourself and to your clients and others with whom you interact. Moving forward may require you to change the way you do things, to confront people and problems, and to motivate yourself as well as others to take action. Anyone can be complacent. Imua takes heart, perseverance, and a certain amount of courage.

These core values are what I look to when I’m confronted with tough decisions. Having these in place and adhering to them makes my decisions easier. More importantly, it makes them right for me and for people who seek my counsel.

Your core values may be different. Whatever they are, think of them as your prized possessions and look to them as the moral code that guides your interactions with people, allowing these values to proactively and positively shape the way you approach others.

Some financial advisors worry that living by a code of conduct such as this will affect their ability to sell and make money. This is absolutely true, though perhaps not the way you might think. Adhering to core values actually improves your ability to make money. Over time, as you incorporate your values into how you serve people, selling becomes much easier. By selling, I don’t mean convincing people they need to buy from you but rather building a relationship where people want to buy from you. Your prospects and clients sense honesty and good intentions, and they’ll trust you. They will begin to actively seek you out for advice.

It’s ideal that people feel they can come to you, confident that the advice you offer is based on their best interests, not yours. And whether you’re in banking, insurance, investments, taxes, or law, they’ll see you as their financial guiding light. You will become their lead financial advisor—not only a trusted advisor but a values-based, Aloha Advisor.

When you treat a person this way, going broad and deep to understand and appreciate what they want, doing so without judgment, and then identifying what they need to satisfy those wants, they’ll come away with a very positive experience. They’ll gladly write favorable reviews about you and provide you with testimonials. They’ll eagerly share their experience with others, talking about you to their family, friends, and colleagues. They’ll refer the people they respect and care about most to you.

In this book, I’ll show you how my core values have played out throughout my career. Over and over, they continue to guide me toward becoming the financial advisor I aspire to be. That person clings to his values while inspiring others to do the same so that we can all serve each other in a way that allows us to live our most fulfilled lives. As you read this book, think about your own core values. What are they? What would you like them to be? How might your values affect your relationships with those you serve?

Suspects, Prospects, Customers, Clients, and Advocates

I have many stories to share with you about my experiences as a financial advisor working with people who wanted something and who came to me or to another advisor to help them get it. While values are first and foremost in how I work with people, for the purpose of clarity, I believe it’s important that you understand the different stages a person may be in within an advisor’s professional relationship. In this book, I refer to people generally as “clients,” and sometimes more specifically as “suspects,” “prospects,” “customers,” “clients,” and “advocates.”

• A suspect is anyone in the world. They may or may not want or need the help of an advisor.
• A prospect is a person who is seeking help or clearly needs help whether or not they realize it. The extent to which they actually want help makes them a better prospect for the advisor.
• A customer is someone who wants a particular product or service and has already made up their mind that whatever it is they want to buy from...