Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance

Connect with clients through financial life planning

Your article was successfully shared with the contacts you provided.

The last taboo isn’t sex – it’s money. Although we may think that our clients speak openly with us about money, the subject often has deeper, more emotional ties that make it difficult to share.

A financial life planning approach can be valuable in bridging this gap and helping clients develop a more satisfying and successful relationship with money.

Financial life planning is an emerging, holistic approach that helps clients understand and articulate what is important to them in life and how this translates to their financial goals. A life planning approach examines what clients want to accomplish in the short- and long-term, what drives their financial decision-making, and how their background and experience influence their feelings about money. For example, we may believe that tax efficiency drives a client’s financial decisions, but the reality is that these decisions are often driven by family, legacy and other more personal factors.

A good advisor will help clients articulate what they want or need – a great advisor will help a client get to the root of what is important to them. A key step in the life planning process is to translate this understanding into concrete language and quantitative, measurable data that is valuable for the financial planning process.

We often assume that clients understand our financial world and its lexicon. Rather than admitting their lack of financial knowledge or understanding, clients may defer to professional advice rather than connect through more tangible life goals. This is often coupled with our natural bias as advisors to impose our beliefs and experiences on the solutions offered to clients.

Most client meetings focus on investment returns and how a portfolio is performing against other benchmarks. However, it is important for us to translate what is happening with our clients’ wealth in terms of their articulated goals, not just benchmark indexes or quantitative reporting. Retirement goals are not as much about percentages as they are about dollars. It is important to monitor if financial goals are on track in dollar terms – these are the terms clients understand best.

While dollars and cents are significant to financial planning, dollars and sense are essential to life planning. A life planning approach focuses more on a client’s changing lifestyle needs, what is critical to the client, and how to advance toward the client’s goals. For example, if the client is ahead of plan, he or she has more latitude to achieve goals previously thought frivolous, such as a sports car or a vacation home. A life planning approach can help fulfill goals that are emotionally important to the client, but were not given a high priority previously.

Financial life planning tools are available through providers such as Money Quotient, Legacy and The Kinder Institute of Life Planning. These programs offer substantive tools, training and processes to explore and understand what is important to clients. Such a touchstone approach that aligns with our clients’ goals may offer us the key to solid, long-term client relationships.

Al Steele is president and CEO of Bellatore LLC, an emerging provider of turnkey asset management services to select financial advisory businesses.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.