Motivational guru went from rainmaker to reputation risk as latest scandals rock his brand. It’s an object lesson for the “influencer” era.
Tony Robbins has been eliciting better performance from everyone around him for four decades. People who thought he walked on water are disappointed and demoralized.
And with his collaborations with financial advisors suspended, the only thing his partners can do is figure out where the relationship went wrong and work differently in the future.
It’s what the gurus call “a teachable moment.”
Too much enthusiasm, not enough controls
Robbins quotes appear in endless advisor marketing materials. He’s an aspirational speaker and writer who gets people excited about their future.
Now that he’s facing persistent charges of sexual misconduct and racially tinged comments have surfaced on tape, his name has a different impact on a brochure or website.
That’s a problem for people who bought into his message to the point where they advertised their affinity with the Robbins brand.
Instead of buttressing their own professional reputations, they’re creating associations that drive prospects away. And that’s a factor in $40 billion RIA Creative Planning pulling the plug on a three-year referral deal with Robbins.
On paper, the relationship looked great. Robbins loves to promote vendors he likes. Making Creative Planning the go-to name he drops brought in a lot of accounts.
But in practice, the accounts were marginal, “mass affluent” assets at best. Cutting Robbins loose doesn’t really cost the firm much in terms of high-quality growth.
And since a lot of high-net-worth people consider the association distasteful, keeping a tainted Robbins onboard is more likely to hurt than help in any material way.
It was time to go. The problem, unfortunately, was that unlike an impromptu quid pro quo, the relationship was enshrined at the org chart level.
Robbins was formally Chief of Investor Psychology, tasked in press releases with training every Creative Planning representative to be more responsive to the ways clients think.
Whether that role ever amounted to more than dropping the firm’s name on TV is beside the point. In the eyes of regulators and the public, the firm vouched for Robbins as much as Robbins vouched for them.
After all, if a client or completely unaffiliated third party points prospects in your direction, it’s just a referral. The prospect evaluates how much weight to give the suggestion and decides accordingly.
Should the referrer fall from grace, it’s not a concern. Casual encounters emerge and evaporate all the time.
When there’s a formal bond, however, mutual rewards come along with shared risk. One side of the bond can become toxic enough to wipe out the benefits for both partners.
I don’t know if that’s where Robbins is now, but the advisory business has an extremely low tolerance for partner risk for a good reason.
Regulatory burdens can stretch across all formal relationships. In many cases, you’re responsible for what everyone on your org chart does.
And if you have all of the responsibility and very little control over the actors, it’s not a relationship worth keeping.
Due diligence and the private label referral
I’m not saying Creative Planning should never have put Tony Robbins on staff. The relationship worked for a few years and now it’s done. We all change.
Besides, when disturbing allegations emerge after decades, it’s hard to argue that due diligence failed. Presumably they did a background check or at least knew who he was, just like any other employee in a key role.
In a lot of ways, society is what changed while Robbins was busy working the crowds. The price of bad behavior has soared while standards of evidence have relaxed.
Even three years ago, we had no idea his reputation would implode.
This is a clear call to action for all firms to evaluate their employee relationships on a rolling basis, not simply at the beginning and then never again.
We’ve seen social rules swing in recent years and will do so again. The important thing is remaining compliant with the current climate.
And if you aren’t willing to do that, don’t take anyone in house. Anyone can mention your name and bring in the prospects. That doesn’t require a public bond.
Or if you prospect using in-house resources, make sure it’s your brand they’re promoting. You don’t want to be tied to any outside center of influence when your own reputation is on the line.
Think of all the shoe companies that pull their sponsorships when a sports star screws up. Standing exit clauses let them end the deal and contain the damage right away.
From what I’ve seen, Robbins wasn’t a great fit for Creative Planning anyway. Accounts he pointed to the firm were smaller and less profitable to service, and it took a lot of them to move the AUM needle.
The firm already charged those people a premium fee just to push them to a Schwab robo relationship. Evidently that wasn’t cost effective for anyone.
Is anyone else at risk?
Since Creative Planning had to disclose the split, I did a deep dive through the Form ADV database to see if anyone else was working with Robbins.
A few people cite prior experience with him or do work with his network on the side. That’s okay. It’s all about open disclosure. I won’t name them here.
A lot of others feature his quotes on their sites and other materials. That’s tricky. I wouldn’t throw all that away quite yet until we see the long-term impact on his reputation.
He might bounce back. Either way, it’s a choice you make with your market in mind. Are your ideal clients repulsed? Would they rather think about anything else?
The real question isn’t about evaluating industry Robbins risk after all. He was a client of one of the Creative Planning predecessor firms who got excited and started telling the world. They turned him into a formal brand ambassador.
(How any client gets to provide testimonials on national TV without inflaming the disclosure and advertising watchdogs remains a little nebulous to me.)
What we need to be ready for is the next Robbins. People implode. Secrets come out or the cultural weather shifts.
Or a deal might simply not work out. Life is all about change. Success is all about being flexible and alert enough to roll with the changes.
Staying bonded to Robbins was a zero-sum strategy at best. Letting go is the smart choice.
And maintaining the flexibility to let go when needed is critical. Maybe they work together in the future. Maybe not.
Any key employee or partner can crack. Succession planning gets us all back to work. Everything else is tactics.
Creative Planning will not only survive but thrive. Robbins will sink or swim on his story. That's his expertise.
As for you, are your influencers the kind of people you want as ambassadors for your brand?