C2 Planning: Client-Centered Planning

Change is under way in the financial planning and financial services profession. Financial products and strategies, once the focal point of client discussions, are increasingly supporting purpose-driven planningthat is, helping clients plan for and create the life of their dreams.

What does it mean to achieve ones life purpose? First, it means that clients must have the opportunity to define their life vision and purpose and to prioritize goals in a safe and non-judgmental environment.

Advisors can help them in this task by learning to ask profound questions. These questions are: (1) client-centered (not geared to sell); (2) open-ended (neither a “yes” nor “no” is required of the client); and (3) contain an emotional, psychological and spiritual dimension from which the client will thoughtfully share his or her answers.

Here are some examples of profound questions:

o What is the purpose of money in your life?

o Is money an excuse for doing something in your life?

o Is money an excuse for not doing something?

o What are the highest uses of your time or talent?

o What lessons have you learned from having money?

o What lessons have you learned from not having it?

o What are your familys assets?

o Where do you want your family to be in 50 years?

o What are the universal principles that will hold your family together?

Client-centered planning invites us to shift the way we conduct ourselves in our professional life. We make this transition first by understanding where we have been and where we are going.

Now lets compare the processes associated with traditional financial planning and values-based life planning. (See chart 1.)

Now that we understand where we are going, how do we get there? First of all, as the advisor, we need to learn a new set of skills, which include:

o Listening with the third ear (the ear between the h and the t in heart). Listening with heart means listening without an agenda to fix, sell or change something for the client. Your sole purpose is to step into the clients world and to connect with him or her.

o Inviting the entire person into the planning process. We need to reach both hemispheres of the clients brain and to include the 5 dimensions of peoplethe financial, emotional, psychological and spiritual dimensions, in addition to the physicalin our client discussions.

o Conducting a values-based conversation. Consider the language differences in chart 2 and then note the changes in the process in chart 3.

Now lets consider 2 parts of the process clients use when selecting advisors: screening and selecting. The first is rational and analytical; the second is emotional and personal.

During screening, the client asks, “Can the advisor do it?” You address this question primarily through your marketing program: Web sites, brochures, seminars etc.

During selection, the client asks, “Can I work with the advisor?” You typically address this question face to face.

During the selection process, we often fall into an “expertise trap” that overemphasizes our expertise. We do this because we:

o erroneously believe this is what the client wants;

o are very comfortable with the topic; and

o have a vested interest in selling our expertise.

Remember, though, that the selection process is largely emotional. What works with both men and women is to show that you care about them and the topics they have come to see you about.

After selection, you should explain that you prefer to work in teams. You thereby convey the message, “I trust others and work with them in your planning process; therefore, you can trust me.”

The message also communicates that you understand the complexity of planning and are comfortable acknowledging that you cannot be technically competent in all areas, nor can you know how to handle every interpersonal situation.

When holding conversations with clients, it is important to create a safe environment. This means remaining neutral or non-judgmental throughout the planning process.

Step into the clients model of the world. Be flexible and respectful. Come to the meeting with an open mind and an open heart. Assure the client the discussion will remain confidential and that you will honor everything you hear.

Be prepared to be a mediator if necessary. Master new skills in conflict resolution. Learn the difference between consensus and agreement. Leave your personal agenda and issues at the door.

Now lets move on to building your client-centered life planning team. Possible teammates include professionals in all areas of life planning.

These areas include:

o Core values and motivations;

o Health and fitness;

o Psychological health;

o Emotional well-being;

o Spiritual Life; and

o Use of leisure time.

Your teammates might also deal with the following:

o Relationships: spouse or life partner, aging parents, children, step-children, grandchildren, adopted children, parents-in-law, other family members.

o Work Transitions: Change in career, new job, job loss, promotion, retraining, start up or purchase of a business, taking a leave of absence, family leave act, serving in the military, redefining work, the workplace and retirement.

Life Transitions: Issues of aging, empty nest, marriage, divorce, birth, death, move/relocation.

Community Connections: Connections with others outside of the nuclear family.

Your teammates might include gerontologists, psychologists, other medical professionals, other professional advisors, attorneys, accountants, bankers, brokers, real estate agents, insurance agents, clergy etc.

Obviously you must address compliance and revenue-sharing issues as you form these teams. These issues will vary from broker-dealer to broker-dealer. It is critical that you work with your compliance department before you activate these relationships.

It has been said that “a mind stretched to a new dimension never returns to its original form.” I have attempted in this article to help stretch your mindand your heart.

That is where you connect with clients. And that is where client-centered planning is formed.

So C2 equals P2. Client-centered planning equals purpose planning. When we can elevate our clients to aligning their life purpose with their planning experience, our lives, too, are elevated.

Enjoy the ride!

Barbara A. Culver, CFP,ChFC, CLU, is president of Resonate Inc., a Cincinnati, Ohio-based financial planning firm. She can be reached at bculver@resonatecompanies.com. This is an abridged version of a presentation she gave at the MDRT meeting in Anaheim.


Reproduced from National Underwriter Edition, June 18, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.